Houghton Mifflin Harcourt acquisition freeze

Taylor514ce · 11-25-2008, 03:44 PM

According to a Wall Street Journal report by Jeffrey A. Trachtenberg, Houghton Mifflin Harcourt will stop acquiring new books until further notice.

A spokesman said "We have a temporary freeze on... We are working on what we already have".

The article attributes the unusual and curious move to general industry slowdown in book buying, then gives figures for national book chains Barnes & Noble Inc and Borders Group Inc. Sales were down 2% in September and down 1.5% for the year.

Greg Anos · 11-25-2008, 04:35 PM

Fascinating. A 2% sales drop and they cut off all their new models. They must be leveraged out the wazoo. I think the HarpersCollins e-book announcement is related. They also see a small drop, so they are madly trying to goose the only part of their business (e-books) that are rapidly growing....

JSWolf · 11-25-2008, 04:41 PM

Houghton Mifflin Harcourt is laying off lots of employees as well. My wife works in the same building in Boston and she knows a few of the people who have been layed off. The problem is that a lot of the jobs that are being mare redundant are specialized and thus, hard to get a new job based on what it was you were doing there.

Greg Anos · 11-25-2008, 04:47 PM

These are classic liquidity squeeze signs. In retail, you can usually tell when a retailer is about to fail when the highest turnover items in the shop suddenly go out of stock. They don't have the money/credit to buy the replacement stock.....

sassanik · 11-25-2008, 11:38 PM

That doesn't make sense to me. Are they making so much money off their current titles that they don't need to aquire new ones?

Amy

bill_mchale · 11-26-2008, 07:58 AM

Well, if Ralph Sir Edward's analysis is correct, they are in a situation where most of the money they are making is already spoken for by royalties, unpaid but promised advances and other financial obligations. This is not an uncommon situation in many companies, but now a lot of companies are having a hard time getting credit which limits their ability to get new authors.

Of course, the ridiculous advances that many publishers have been paying lately might have something to do with it.

--
Bill

Taylor514ce · 11-26-2008, 09:00 AM

Publisher's Weekly on the announcement.

A Crime Fiction Blogger's take on it, with further links.

Boston Globe article on their layoffs.

Small news snippets on Shelf Awareness.

11-25-2008, 03:44 PM	#1
Taylor514ce Actively passive. Posts: 2,042 Karma: 478376 Join Date: Feb 2008 Location: US Device: Sony PRS-505/LC	Houghton Mifflin Harcourt acquisition freeze According to a Wall Street Journal report by Jeffrey A. Trachtenberg, Houghton Mifflin Harcourt will stop acquiring new books until further notice. A spokesman said "We have a temporary freeze on... We are working on what we already have". The article attributes the unusual and curious move to general industry slowdown in book buying, then gives figures for national book chains Barnes & Noble Inc and Borders Group Inc. Sales were down 2% in September and down 1.5% for the year.

11-25-2008, 11:38 PM	#5
sassanik Guru Posts: 774 Karma: 1211741 Join Date: May 2008 Location: Oregon Device: EB1150, iPhone, Cool-er Purple, Pocketbook 360, Kindle Fire	why? That doesn't make sense to me. Are they making so much money off their current titles that they don't need to aquire new ones? Amy

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11-25-2008, 04:35 PM	#2
Greg Anos Grand Sorcerer Posts: 11,248 Karma: 35000000 Join Date: Jan 2008 Device: Pocketbook	Fascinating. A 2% sales drop and they cut off all their new models. They must be leveraged out the wazoo. I think the HarpersCollins e-book announcement is related. They also see a small drop, so they are madly trying to goose the only part of their business (e-books) that are rapidly growing....

11-25-2008, 04:41 PM	#3
JSWolf Resident Curmudgeon Posts: 73,983 Karma: 128903378 Join Date: Nov 2006 Location: Roslindale, Massachusetts Device: Kobo Libra 2, Kobo Aura H2O, PRS-650, PRS-T1, nook STR, PW3	Houghton Mifflin Harcourt is laying off lots of employees as well. My wife works in the same building in Boston and she knows a few of the people who have been layed off. The problem is that a lot of the jobs that are being mare redundant are specialized and thus, hard to get a new job based on what it was you were doing there.

11-25-2008, 04:47 PM	#4
Greg Anos Grand Sorcerer Posts: 11,248 Karma: 35000000 Join Date: Jan 2008 Device: Pocketbook	These are classic liquidity squeeze signs. In retail, you can usually tell when a retailer is about to fail when the highest turnover items in the shop suddenly go out of stock. They don't have the money/credit to buy the replacement stock.....

11-26-2008, 07:58 AM	#6
bill_mchale Wizard Posts: 1,451 Karma: 1550000 Join Date: Sep 2008 Location: Maryland, USA Device: Nook Simple Touch, HPC Evo 4G LTE	Well, if Ralph Sir Edward's analysis is correct, they are in a situation where most of the money they are making is already spoken for by royalties, unpaid but promised advances and other financial obligations. This is not an uncommon situation in many companies, but now a lot of companies are having a hard time getting credit which limits their ability to get new authors. Of course, the ridiculous advances that many publishers have been paying lately might have something to do with it. -- Bill

11-26-2008, 09:00 AM	#7
Taylor514ce Actively passive. Posts: 2,042 Karma: 478376 Join Date: Feb 2008 Location: US Device: Sony PRS-505/LC	Publisher's Weekly on the announcement. A Crime Fiction Blogger's take on it, with further links. Boston Globe article on their layoffs. Small news snippets on Shelf Awareness.

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