Gibbs Smith Publishing, which celebrated its 40th anniversary last year and is regarded as one of the most distinctive lifestyle publishers in the U.S., is reorganizing the company in order to meet the financial challenges it has faced since 2008. “As every publisher knows, the world changed in October 2008,” said Gibbs Smith CEO Christopher Robbins. “Until that time our average unit sales were increasing every year, but we were forced to reduce out staff by 39% in February 2009 in order to preserve our cash flow.” Gibbs Smith has two divisions, trade and educational; the latter accounts for about one-third of total sales and includes social studies textbooks for 23 states in the U.S. “When state sales tax revenues fell, our school and library customers took a big hit as well.” As a specialized publisher with a significant focus on design titles, when the housing bubble burst in 2008 sales on those titles also declined. To compensate, the press now concentrates more on cookbooks and its children’s titles.
Earlier this month, 17 employees were asked to reduce their overall compensation by 20% in exchange for a four-day workweek. “We presented this idea to our department managers a few weeks ago and had an open discussion about it,” said president and founder Gibbs Smith. “We know this is a sacrifice. No one was forced to accept these terms; we are not dictatorial and run the company more like a co-op than anything else. Those who could comply did, and the employees who couldn’t are still with us.” In addition, publicist Jennifer King was recently laid off. “We found we could absorb some of her efforts into different departments,” Smith explained
Gibbs Smith has also reduced its co-op advertising allowances. “Co-op is an archaic concept that now gives little return on investment,” said Robbins. “We’ve cut back on the number of review copies we send out, too.” The company no longer exhibits at BEA, and has changed the size and format of its catalogues to further lower expenses. Citing the restructuring of the buying division at Barnes & Noble and the recent closure of more than 200 Borders stores, Robbins suggested that publishers’ sales may never return to their former levels.
The press has a strong Internet and digital presence now. “All of our books are available on Kindle, and we were in the first tranche with Apple when the iPad came out,” says Smith. “As an industry, print has gone down four years in a row. We have to be more competitive in the e-book market. All the content we acquire at this point has to apply to both digital and print.”
The press is re-engineering how it runs every aspect of the company. “We’ve reduced staff across the board, but kept everything in place regarding digital deployment and creation,” Robbins says. Some of the decisions seem to have had a positive effect because unit sales at Gibbs Smith are now up 7% over last year. “2012 will be a defining point for us,” Robbins continues. “This has been a painful time, but we’ve used it to re-tool to the best of our ability.”
