Another Steep Drop in Sales at HarperCollins; Borders Braces for Depressed Spending
Sales at HarperCollins dropped by nearly 20 percent in their fiscal third quarter through the end of March, falling by $59 million to $243 million for the period. The unit swung from adjusting operating income of $29 million a year ago to a $38 million loss this quarter, including a $30 million restructuring charge due to the layoffs earlier this year. The drop in sales is only modestly better than the 25 percent drop-off last quarter.
The publisher is showing an operating loss for the three quarters of this fiscal year of $12 million (compared to profits of $132 million at this point last year.) Revenues for the past nine months of $863 million are 17 percent below the $1.038 billion recorded for the same period in the previous fiscal year.
Overall, operating earnings at parent News Corp. fell by more than half, with results "directly reflect the continuing weakness of the global economic climate."
Elsewhere, new Borders ceo Ron Marshall told a conference in Barcelona that US consumer spending "may be many, many years before we regain the spending levels we enjoyed just last year."
He added, "Our view increasingly is that in certain discretionary categories the total market has shifted down -- depending on the category, by between 15 and 25 percent."
He says Borders is trying to prepare itself for smaller business: "We've worked very, very hard to reduce our permanent cost structure and improve our financial structure so that we could be profitable at that lower level (of consumer activity).
ONCE AGAIN-LOOK TO THE INTERNET FOR SALES-SPENDING A LOT OF TIME TRYING TO GET BOOKS INTO STORES IS NOT THE BEST MARKETING PLOY UNDER CURRENT CIRCUMSTANCES-IT MAY NEVER GO BACK TO 'NORMAL!'