Friday, February 04, 2011

Canada’s Largest Book Distributor to Initiate Bankruptcy Proceedings

The Canadian publishing industry was rocked on Thursday when H.B. Fenn, the country’s largest book distributor, filed notice of its intention to initiate bankruptcy proceedings. From The Toronto Star:
“We have worked extremely hard to build the company and keep it going even under today’s adverse conditions,” read a statement by CEO Harold Fenn, who founded the company in 1977. “My heart goes out to our over 125 employees and to the many publishers we represent, as well as the customers that have supported us over the years.”

All Canadian publishers are suffering to one extent or another from price discounting and the emergence of digital reading, but the reliance on distribution makes Fenn a particular -- although not exclusive -- case.
The operation is an extensive one.
According to the company website, it represented 40 publishers and distributed more than 50,000 titles.

Key Porter Books, founded in 1979 by Anna Porter and purchased by Fenn in 2004, represented the publishing arm of HB Fenn. In its heyday, Key Porter published works by such notable Canadian authors as Joan Barfoot, Margaret Atwood, Farley Mowat and Dennis Lee. In recent years, its lists have thinned.

“It’s a sad day in Canadian publishing,” said Kim McArthur, president and publisher of McArthur & Co., an independent Canadian publisher that also relies heavily on distribution revenues. “This could be us. It’s been very difficult.”
According to Quill & Quire, though the announcement has come as a surprise, the writing may have been on the wall:
H.B. Fenn suffered a major setback two years ago when its largest sales and distribution client, Hachette Book Group, opened a Toronto publicity and marketing office and took over sales for major national accounts including Indigo, Costco, and wholesalers North 49 and BookExpress. (H.B. Fenn continued to handle sales for Hachette’s independent and library accounts.) Hachette also moved fulfillment from Canada to its Indiana warehouse.

A further sign of trouble, H.B. Fenn closed down Key Porter’s Toronto offices last September and laid off the bulk of staff. In early January, Q&Q learned that Key Porter had laid off its remaining editorial staffers and had suspended publishing operations indefinitely.
Under the Bankruptcy and Insolvency Act, the company has 30 days to file a proposal to its creditors. During that time, it can continue to operate its business as usual.



Anonymous Ontario Bankruptcy said...

You’d think so wouldn’t you? In this particular case, the offer may be accepted because we are talking about some fairly large numbers. The caution is this – the major CDN banks have told the trustee community they are looking for 1/3 repayment – if you make an offer lower than that you have to accept the fact that it doesn’t meet the minimum criteria and therefore has a higher than average chance of being rejected.

Ontario Bankruptcy

Thursday, February 24, 2011 at 12:55:00 AM PST  

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