Eleven months of sales and earnings from Harlequin helped offset declines at parent company, HarperCollins. HC, which was stung by a slowdown in sales of the Divergent trilogy--which was a significant boon to the publisher's bottom line in 2014--saw a 16% increase in revenue for the fiscal year ended June 30, 2015, over fiscal 2014. Additionally, EBITDA rose 12%.
Total sales at HC, which completed its purchase of Harlequin on August 1, 2014, hit $1.67 billion, while EBITDA rose to $221 million. Excluding the Harlequin purchase, revenue at the publisher was down 2% while earnings also fell 2%, parent company News Corp reported.
In addition to the Harlequin purchase, HC benefited from strong backlist sales led by American Sniper sales. HC CEO Brian Murray told PW that HC'sU.S. general books group had a very strong year with a number of books in addition to Sniper selling well. Sales in the children's group were down, but with titles in the Divergent trilogy doing better than expected the decline was relative modest, Murray said, who added that excluding Divergent sales from fiscal 2014 and 2015 children's sales were up. "That's encouraging," he said. The company's Christian business "took a hit" in the year due to the bankruptcy of Family Christian, but Murray said HC will continue to trade with the chain. "We'll give them a chance," he said.
Murray said he was very happy with how the integration of Harlequin has unfolded. The publisher is on track to realize about $20 million in cost savings, most of which will be realized in the current fiscal year, parent company New Corp said. Murray was quick to note that while there is still more work to be done in the Harlequin integration, HC is reinvesting in the business and he pointed to the rebranded of Harlequin offices overseas as HarperCollins operations. The goal of the new offices, which began in Germany last October, is to give commercial authors an international platform and Murray said he expects to see sales grow outside of the U.S. as a result of the initiative. Seven former Harlequin offices are now operating as HarperCollins and Murray hopes to transition offices in France and Italy before the end of the calendar year.
Digital sales of both e-books and digital audio accounted for 22% of consumer revenue in the year. Murray said HC has definitely seen a slowing in e-book sales, but along with that a rise in sales through bricks-and-mortar stores. "It looks like the market has become more stable," he said. Strong sales of digital audio have also helped to offset slower e-book sales.
Murray declined to make any predictions for the current fiscal year, but acknowledged HC is off to a strong start with the tremendous sales of Go Set a Watchman (sales of which are two-to-one print). He praised the HC team for doing a "great job" in positioning the book and he expects the national conversation about the Harper Lee novel to go on for the rest of the year.
This story has been updated since it was first posted Wednesday evening.
