It has been a challenging few years for Independent Publishers Group since it bought the U.K.-based United Independent Distributors (UID) in 2021, IPG CEO Joe Matthews acknowledged in an interview with PW. Turning around that company's fortunes proved much harder than he anticipated, and the trouble in the U.K. was compounded by issues in IPG’s U.S. business.
After a record 2021, sales softened in the U.S. in 2022 and, like many companies, IPG suffered following Amazon’s drastic cuts to orders in the summer of 2022. IPG managed to ship lots of inventory in the fourth quarter of 2022, but many of those books were returned in 2023. The company’s budget took a hit as a result, prompting, in part, IPG’s recent restructuring, which included laying off some employees and downsizing its publishing arm, Chicago Review Press.
While Amazon returned to a more normal ordering pattern last year, it was a different move by Amazon that hurt IPG’s financial performance in 2023. The e-tailer’s decision, last spring, to stop importing books from various American companies into its European and U.K. warehouses—instead requiring U.S. publishers to make their books available closer to European points of sale—also dealt some damage, costing IPG and other publishers and distributors millions. But it also sparked a new idea in Matthews: to use IPG’s U.K. distribution business as a way for U.S. publishers to meet Amazon’s requirements.
To fast-track that program, IPG has drastically increased the number of trade titles it carries in its U.K. facilities. In addition, Matthews has expanded Scott Hatfill's role as v-p of international trade sales to include establishing domestic U.K. trade accounts, and he has begun collaborating with IPG's business development team to open new international distribution channels and sign new publishers. In particular, Hatfill is working with IPG's Eurospan group, which provides sales and marketing for academic and professional publishers, to offer a trade sales component as well.
Matthews has been encouraged by early results. Trade sales in the U.K. have increased by about 25% since the program began last fall, with a number of IPG U.S. publishers giving their U.K. rights to IPG, and Matthews said that he continues to field questions from publishers about the program.
Matthews sees the ramping up of trade sales as one more piece in IPG’s turnaround of its U.K. business, and said that the company’s two warehouses are operating much more efficiently now than when IPG acquired them. Acknowledging that IPG “faced plenty of headwinds” when it bought what he referred to as “distressed companies,” Matthews added that IPG has invested a lot to retool and stabilize UID’s business, including to move around millions of copies of books and shut down some facilities. (There were originally five warehouses when IPG bought the business.) The final part of the retooling process—the installation of a new management system—is expected to be completed soon.
Back in the U.S., Matthews named Tim McCall—who joined IPG in December from Baker & Taylor after serving in different sales roles at a number of companies—IPG’s new v-p of sales. McCall, who will also manage IPG’s Barnes & Noble account, will lead IPG's U.S. sales team, and is charged with helping IPG work more closely with its publishing partners. To that end, IPG plans to hold an in-person sales conference in Chicago this summer.
Matthews said that IPG’s sales force is fully staffed across all channels, and credits its strategy of serving a broad variety of categories and formats as a key reason behind the company’s status as the last independent distributor of its size in the country. IPG’s Christian publishers, for example, have grown more reliant on the general trade stores following widespread closures of Christian retail outlets.
While the company is large enough to meet the various needs of its clients, it is still smaller than Ingram and the distribution arms of such major publishing houses as Penguin Random House and Simon & Schuster. That isn’t, Matthews noted, always a bad thing. “You can be a bigger fish in our smaller pond but have access to the entire market,” he said, pointing to Wonder House, whose My First Library series has sold more than 170,000 copies in about a year, as an example.
In March, IPG will begin a new initiative with Dulles, Va.–based Books International to offer print-on-demand hardcovers for backlist titles. David Hetherington, Books International’s v-p of global business development, said that the partnership will allow IPG’s client publishers to order POD runs of hardcovers totaling to as few as 50 copies—and, most importantly, "at a price point that is actually affordable for the publisher." For interested clients, IPG has created a pass-protected website, where hardcover costs can be calculated and print orders can be fielded by IPG's digital printing team.
IPG represents more than 200 “solid” indie presses, Matthews said, and while the company has no minimum sales requirements, it still needs to be selective in the publishers it signs. IPG is willing to take a chance on new publishers, but being the last big independent means that “we are pickier than ever,” Matthews added.
Matthews is upbeat about his company’s prospects for 2024. He characterized fourth quarter sales last year as strong, adding that returns finally seem to be under control and that this January’s sales, reassuringly, were up over sales during the same period last year.
One ongoing bright spot for IPG has been sales of Spanish-language titles, which are up 15% since 2021, Matthews said, noting that the gains have come from an increase in the number of titles IPG carries and stronger demand from libraries and bookstores. The downsizing of Chicago Review Press to focus the list on fewer titles is also paying off, Matthews insisted, pointing to solid sales for former U.S. Secret Service agent Paul Landis’s Kennedy assassination memoir, The Final Witness, which has sold about 25,000 copies.
Matthew’s optimism also stems from broader circumstances, namely encouraging industry and economic trends. He thinks that the industry may finally be free of “post-pandemic ripples. Things finally feel steady. Ever since the pandemic, every year has been a rollercoaster, and I hope we are now getting off.” And with interest rates likely coming down and inflation beginning to dip in earnest, Matthews predicts that 2024 will be “a good bookselling year.”
