Golden Cuts Quarterly Loss, Advances on Several Fronts
Jim Milliot -- 11/17/97
Golden Books Family Entertainment has reported substantially reduced losses for the third quarter and nine-month period that ended Sept. 30, 1997. According to the company, the net loss in the third quarter was $17.9 million, compared to a net loss of $96.8 million in last year's third period. Sales in the quarter fell 25%, to $53.3 million. For the nine months, Golden's net loss was $38.1 million, compared to $132 million in the third quarter in 1996. Sales were down 20%, to $169.8 million.
Company chairman Richard Snyder noted that since May 1996, "we have acted decisively to resurrect this company. Some of our decisions constrained near-term growth in children's publishing and will have a corresponding effect on full-year sales and EBITDA." Snyder added that he remains "supremely confident in our future." Golden's stock remained unchanged at the report, holding at $9.75.
Adult Publishing Launched
A positive development for Golden has been the successful launch of its adult publishing group. Now that the first list from Golden Books Adult Publishing Group, comprised of six titles, has been shipped, division president and publisher Bob Asahina is developing new plans to reestablish Golden in the adult market. The adult group will follow the corporate-wide strategy of exploiting the Golden brand name, and while Golden d sn't have the same widespread recognition in the adult field as it d s in children's, there are areas where Asahina believes Golden can flourish.
In the coin collection area, for example, Golden's Whitman imprint was the preeminent publisher in the field, and Asahina would like to see it regain that position. Similarly, Golden was one of the first publishers to enter the field guide category, and Asahina told PW he was close to signing a deal for a new series of guides that he hopes to release in 1999.
Co-branding is also part of Asahina's strategy, and the company plans to release the first of its 15 titles to be done with Parenting magazine in the fall of 1998. "We're looking for partners who bring something to the table," Asahina said. According to Asahina, the adult group will focus on family and home areas, and while he said that covers a lot of ground, it also excludes lots of areas such as commercial fiction. "We're not looking to become a blockbuster publisher. We're looking for solid frontlist titles that can backlist," Asahina said, adding that that d sn't mean Golden isn't interested in publishing a bestseller or two. Nevertheless, he called the 500,000-copy printing of Stephen Covey's Seven Habits of Highly Effective Families an "aberration." The title, which shipped earlier this fall, is off to a good start and was number four on the New York Times Advice, How-to and Miscellaneous Hardcover list for November 16. The adult group staff, which numbers about 10, also produced an audio edition of the Covey title, but Asahina said that at least for the time being, the group will only publish audio "opportunistically."
The adult unit is also working with the Golden entertainment group on some book projects. Scheduled for spring is a book on what families can expect when owning a dog, featuring Lassie, whose character is owned by Golden. And while the adult group is publishing its new titles in hardcover, Asahina hopes to begin building a trade paperback backlist by fall 1998.
Sells Printing Plant
Golden Books has signed a definitive agreement to sell its Cambridge, Md., printing operation to Mail-Well. Terms of the deal were not disclosed. The Cambridge facility, which is a web- and sheet-fed commercial printer, has annual sales of approximately $33 million. Mail-Well said it will consolidate its smaller Cambridge plant into the Golden facility. The sale will have no impact on Golden's decision to publish many of its products in its new facility in Wisconsin.
In other news from Golden, the company has named two men to head up the sales effort directed solely at Wal-Mart and Kmart. Paul Paschal has been named account director for Wal-Mart, while David Griscom has been named account director for Kmart. Prior to joining Golden, Paschal was at Ralston Purina, where he was product supply manager of Team Wal-Mart. Griscom moves to Golden from Minute Maid Co., where he most recently was regional sales manager, customer development. His customers included Kmart and Toys "R" Us. Both men will have a small, dedicated staff.
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