HMH hits Chapter 11

[fjtorres]

The weakest of the publishing conglomerates, HMH, filed chapter 11 papers.
It wasn't ebooks that pushed them over the edge; apparently it was textbooks.

"The global financial crisis over the past several years has negatively affected" Houghton Mifflin's financial performance, in a business that "depends largely on state and local funding" for the schoolbook market, said William Bayers, company general counsel, in court papers.

He cited "recession-driven decreases" and "purchase deferrals" by the states and a "lack of anticipated federal stimulus support" for "substantial revenue decline."

From: http://www.sfgate.com/cgi-bin/articl...#ixzz1vWuEoqdD

[Kumabjorn]

Life is sweet as a provider for the public sector, and then it's not.
Remember Wang computers? They delivered a lot of systems to the public sector. When PCs came along their response was to take those with purchase decisions on foreign trips. No amount of travel could cover for the price differential to desktops though.

[ProfCrash]

http://www.businessweek.com/news/201...for-bankruptcy

Houghton Mifflin Harcourt Publishing Co., the publisher of authors from Mark Twain to J.R.R. Tolkien, sought bankruptcy protection to eliminate more than $3 billion in debt.

The company, based in Boston, listed $2.68 billion in assets and $3.53 billion in debt in Chapter 11 documents filed today in U.S. Bankruptcy Court in Manhattan. More than 20 affiliates also entered bankruptcy, including Broderbund LLC and Classroom Connect Inc.

“The global financial crisis over the past several years has negatively affected” Houghton Mifflin’s financial performance, in a business that “depends largely on state and local funding” for the schoolbook market, said William Bayers, company general counsel, in court papers.

He cited “recession-driven decreases” and “purchase deferrals” by the states and a “lack of anticipated federal stimulus support” for “substantial revenue decline.”

Discuss

[elcreative]

Originally Posted by ProfCrash

http://www.businessweek.com/news/201...for-bankruptcy



Discuss

Or combine with earlier thread posted here: http://www.mobileread.com/forums/sho...d.php?t=178946

[ProfCrash]

Damnit, I went looking and didn't find it. Sorry!

OK, seriously, HMH is secret code beyond me.

[ProfCrash]

My topic is more clearly named. (winks)

[fjtorres]

Hey, It happens to the worst of us, too.
(I missed one today.)

[fjtorres]

Originally Posted by Kumabjorn

Life is sweet as a provider for the public sector, and then it's not.
Remember Wang computers? They delivered a lot of systems to the public sector. When PCs came along their response was to take those with purchase decisions on foreign trips. No amount of travel could cover for the price differential to desktops though.

I remember Wang.
Just as we started getting PCs, central IT "gifted" our group with a $30K Wang system for the secretaries.
The facilities people, looking to save a few bucks, shut down building A/C one weekend in august. Took over a week to fix the system and recover the data.
Our PC ATs? Didn't even notice.
The boss did notice and committed to a full PC migration.

The big publishers are looking to textbooks to make up their pbook losses.
The HMH example may be a warning: relying on "the public largesse" is no sure thing.

[teh603]

Looks like gouging on textbook prices finally bit them in the butt. Anyone want some champagne?

[SpyderKB]

Damn. Now I'll never get a fake leather edition of Silmarillion to match my fake leather Lord of the Rings and The Hobbit. Had those 2 for ages just waiting for the final third.

[The Hooded Claw]

I once made a mistake myself....I thought I was wrong about something, then it ended up I'd been right all along!

Just to be semi-on topic, I will say that I feel no sympathy for HMH, I mean Houghton Mifflin Harcourt. Perhaps the business that forms out of the rubble will be more open-minded about finding a better business model to move forward with. I pity them, _I_ certainly don't know how to fix their business. I hope the new management does.

[Kumabjorn]

Originally Posted by fjtorres

I remember Wang.
Just as we started getting PCs, central IT "gifted" our group with a $30K Wang system for the secretaries.
The facilities people, looking to save a few bucks, shut down building A/C one weekend in august. Took over a week to fix the system and recover the data.
Our PC ATs? Didn't even notice.
The boss did notice and committed to a full PC migration.

The big publishers are looking to textbooks to make up their pbook losses.
The HMH example may be a warning: relying on "the public largesse" is no sure thing.

The problem for those supplying the public sector - rather than the chaos of the market - is that when they are cut off it is usually brutal. No slow decline, no time to recover, it's like being guillotined.

[tubemonkey]

Houghton Mifflin Harcourt Partners with B&N to Offer Pre-Loaded Nooks for K-12 (09 May 12)

K–12 school libraries looking to jumpstart their ebook collections can now order pre-loaded Nooks through a new partnership between Barnes & Noble and publisher Houghton Mifflin Harcourt (HMH).

Hmmm...

[HarryT]

Originally Posted by SpyderKB

Damn. Now I'll never get a fake leather edition of Silmarillion to match my fake leather Lord of the Rings and The Hobbit. Had those 2 for ages just waiting for the final third.

Why not? Applying for Chapter 11 protection doesn't mean stopping business. In fact, it means precisely the opposite - continuing business while you look for a solution to your financial issues.

If textbooks are the problem, perhaps the answer is to sell off or shut down the textbook business.

[Apache]

Originally Posted by HarryT

Why not? Applying for Chapter 11 protection doesn't mean stopping business. In fact, it means precisely the opposite - continuing business while you look for a solution to your financial issues.

If textbooks are the problem, perhaps the answer is to sell off or shut down the textbook business.

Usually by not having to pay your vendors the money you owe them.
Zales declared Chapter 11 in the early '90s and was forgiven the millions it owed Town and Country. And they got to keep the merchandise they did not pay for.
Town and Country went out of business because of this. Zales is still around and has declared Bankruptcy more than once.
Apache