Bendon Publishing International, located in rural Ashland, Ohio, has grown quickly since it was founded in 2002 by partners Ben Ferguson, Don R. Myers III and Terry Gerwig, all former executives at Landoll Inc., which was sold to Tribune Co., which in turn sold it to McGraw-Hill. Bendon expects to ship more than 80 million children's books to 50,000 stores this year, and sales are up 30% compared to 2006, according to Ferguson, who said Bendon has been profitable every year since its launch.
One reason for Bendon's success, Ferguson believes, is that it offers a turnkey service, which keeps costs low and turnaround times fast. In 2005, it moved from its former 5,800-sq.-ft. facility into a 248,000-sq.-ft. building that houses all its operations, from design to printing, warehousing and fulfillment. Through an alliance with Truax, an Ashland County printer, the bulk of Bendon's manufacturing is done onsite at its 22-acre headquarters while about 25% is outsourced to China. Bendon's warehouse can store eight million to 12 million books.
The company began as a publisher of coloring and activity books and has expanded into other juvenile formats. Its first move was into the education market—this segment now accounts for 25%—30% of sales—with a line of licensed “edutainment” titles for pre-K through grade 2. “There's more upside to the educational portion than to any other part of our business,” noted Myers.
More recently, Bendon has begun publishing additional formats such as board books, tween-targeted poster books and personalized titles (the last through an alliance with Picture Me Books that allows Bendon to handle all of Picture Me's retail business). New areas for 2008 include storybooks, a format Bendon is launching with Warner Bros.' Tweety license, and crossword puzzle books.
Company growth from 2002 to 2005 was driven by increases in the number of stores carrying its titles. Since 2006, Bendon has shifted its focus toward deepening the assortment purchased by existing customers. It is making more inroads into trade bookstores, which traditionally are not strong supporters of the coloring/activity format. Matt Figley, regional sales manager, reports that Bendon has been able to increase its presence in the trade by creating items such as kits and multititle packs that can command a higher retail price. And John Norris, director, product management at Levy Home Entertainment, said the wholesaler has increased its business with Bendon because of its willingness to tailor product for customers. “No publisher does as many unique items for our customers as Bendon does,” Norris said, estimating that Levy's business with Bendon will grow by 150% this year.
About 80% of Bendon's business is licensed titles; it has 27 licensing contracts for more than 100 properties. Bendon plans to add new licenses mainly from licensors it already works with, such as Disney (with which it publishes about 15 brands) and Hasbro (five). Other licensing partners range from the NBA and NASCAR to Marvel and Sesame Workshop.
“Our portfolio is made up of the down-the-middle-of-the-fairway properties,” said Myers, who believes the company's alliances with evergreen, rather than flash-in-the-pan licenses, will be key to steady future expansion.
“We've grown at the rapid pace we have, and in a healthy manner, because of the good relationships we have with licensors and retailers,” said Ferguson. “What's got us to the dance are the licenses and formats we've grown with, and those will stay core to our business. I'm confident that we will double the size of the business within five years.”
