The Houghton Mifflin Harcourt Trade & Reference group has not had an easy time of it since it was created in 2007 following the acquisition of Harcourt by HM's parent company Educational Media and Publishing Group. In addition to the usual consolidation issues of combining staffs, closing offices, and blending corporate cultures, the division had to deal with the shaky finances of its parent company; being put up for sale; a temporary pause in acquiring new titles; and the worst economic downturn since the Depression.
"It is an understatement to say it was a difficult two years," said Gary Gentel, who will mark three years as president of HMH Trade & Reference this July. Combining the Harcourt and HM trade divisions, Gentel acknowledged in an interview at the division's New York office, "was a painful process," one that resulted in editors and authors leaving the company. The new HMH now publishes 100–150 fewer titles than the companies did as separate publishers. But paring the list also allowed HMH to give the books it does publish its full attention, Gentel said, a strategy that has paid off in higher profits on fewer sales.
While morale in the trade group began to improve, first, with the decision to pull the unit off the market early last year, and then with last July's appointment of Bruce Nichols as senior v-p and publisher for adult & reference, the announcement early in 2010 that EMPG had refinanced its debt came as " a tremendous relief," according to Gentel. "It lifted a heavy burden."
With the finances of EMPG on firmer ground, Gentel and his trade management team have been able to focus on "solving problems and dealing with issues that come up in the normal course of doing business." With 175 employees in New York and Boston, HMH is on track to publish about 200 adult and 300 children's titles in 2010, with all of the new adult and most children's titles being released simultaneously as e-books. With regard to the e-books, HMH is in negotiations to move to the agency model, said Gentel. HMH is also digitizing its backlist and will have 4,000 titles digitized within the next few months.
HMH has a six-person digital strategy and planning group, led by Cheryl Creamer-Toto. Gentel noted that HMH, with its track record in reference publishing, has a history of turning print materials into money-making digital products. Digital materials "are a huge part of reference's bottom line," Gentel said. And, similar to reports from other trade houses, e-book sales of trade titles at HMH have shown tremendous growth so far this year, quadrupling, according to Gentel. HMH Trade & Reference also has access to the corporate digital resources of EMPG, and the reference unit is collaborating with HMH's k-12 group on some digital products. A major new initiative between HMH Trade & Reference and k-12 will be announced soon, Gentel said.
Despite the various digital efforts, the focus at HMH Trade & Reference remains on doing what HM and Harcourt have always done best—publish literary fiction and serious nonfiction while continuing to take advantage of a deep backlist in both the adult and children's groups. The recent acquisition of two unpublished volumes by Philip K. Dick plus 39 of his backlists titles reflects the drive to further enhance HMH's backlist. "We are spending lots of resources to build the backlist," said Gentel, who noted that while some publishers are struggling with that segment, HMH's backlist sales have increased dramatically and accounted for about 60% of total revenue in 2009.
HMH is also in the process of taking back paperback rights to both adult and children's works, repackaging titles and, as Nichols described, investing in lead fiction works that will backlist well. "Feeding the backlist is crucial," said Nichols. While repackaging the backlist in trade paperback assortments for different accounts is an important part of HMH's backlist efforts, it has also created a new hardcover classics series that will launch in the fall. The line will pair two works from established authors in a hardcover edition priced at $22. The line will kick off with titles by Jonathan Safran Foer, Virginia Woolf, Jhumpa Lahiri, and George Orwell.
Not all of HMH's attention is going to the backlist, however. Nichols is very high on a debut novel by Bruce Machart, The Wake of Forgiveness, which Nichols said "grabs you by the throat." Philip Roth returns in the fall with Nemesis, a novel that deals with the 1944 polio epidemic in Newark. Three Nobelists will also have new works—Jose Saramago, Günter Grass, and Wislawa Szymborska. Adult nonfiction will be led by Steven Rattner's Overhaul and As Always, Julia: The Letters of Julia Child and Avis DeVoto. As usual, HMH will sprinkle in some cookbooks; in fact, Karen Tack's What's New, Cupcake? is currently HMH's hottest book.
Both HM and Harcourt were known for strong children's backlist before the merger, and the combination resulted in an organization that boasts 52 Newbery winners and 44 Caldecott winners, said Betsy Groban, senior v-p and publisher of the children's book group comprising Houghton Mifflin Books for Children, Harcourt Books for Children, Clarion Books, Sandpiper, and Graphia. Like the adult group, the children's division is acquiring electronic rights to new and old books, although Groban acknowledged that digital sales in adult are substantially ahead of children's. But as four-color technology moves forward, digital sales in children's "could become huge," and she speculated that new projects will be driven by authors and illustrators. The division has developed some successful apps (Curious George is tops), but for this fall will concentrate its efforts on its print titles. Groban said that David Weisner's Art and Max is expected to be the company's big picture book, adding that predictions of the demise of the picture book market are "premature." HMH has devoted more resources to the hot young adult area, and this winter won a heated auction for Annexed, a novel by Sharon Dogar that recounts the experiences of Anne Frank from the point of view of Peter van Pels, the teenage boy sharing the attic space where Frank was hiding. Line extensions are important to any children's division, and HMH had a holiday hit with a pop-up edition of The Little Prince. Coming in the fall is a graphic novel edition of the classic, being done by Joann Sfar. HMH's line extension champ is Curious George, which has sold 60 million copies in 225 versions in the 70 years the character has been published by HMH.
With HMH's strongest fall lineup since the merger, Gentel said the company is well positioned to have a good year in what is still a difficult marketplace. But he is confident that the worst days of consolidating the two companies are over. In a sign of how much things have turned around, Gentel said that rather than being on the block itself, HMH is prepared to make an acquisition of its own if the right property were to come along.
