Bertelsmann's revenues from books in the U.S., swollen by the new 27-imprint Random-BDD combination, will add up to 40% of the take of the entire worldwide book group in the next fiscal year, according to group chief Frank Wossner. He made his comments at Bertelsmann Buch AG's annual rendezvous with the press at Munich headquarters, eight weeks after the traditional conference of the whole group at Gütersloh (News, Sept. 28).
Wossner spoke against a background of flat bookstore sales and languid club revenues that has given the book sector unusually poor press in its European home market. (There has been speculation that new group president and CEO Thomas Middelhoff would cut off some heads if he could.)
For the business year ending June 30, 1998, sales rose just slightly over 2% (to a fraction under $4 billion). Wossner's much more optimistic outlook for next year was due to what he called "the largest consumer books publisher in the English-speaking world." The expected growth in U.S. revenues will mark an increase of 12 percentage points from last year's 28% share. And of course the larger American slice of the pie will leave smaller portions for the German-language home market (27% vs. last year's 34%) and the rest of Europe (down from 36 to 31%). [What's likely to happen in Britain can be guessed from a report in the Bookseller noting that Random House and Transworld together captured the top five slots, and eight of the top 15, on the latest bestseller list -- representing 64.5% of total sales of the 15; in mass market fiction Bertelsmann held the top three listings, four of the top five, seven of the top 10 and nine of the top 15 -- or 68.9% of the total chart.]
In a chronically ailing sector, professional information, Bertelsmann's sales last year dipped from DM 737 million to DM 707 million ($386 million), in large part a result of disinvestments in distance learning and patent publishing businesses. Bravely confronting what it called the "negative economic environment," the group will henceforth focus on what it sees as its core businesses -- building construction, medicine, transport, industry, science and technology. (That Bertelsmann is far from being discouraged by what it describes as the "restricted" medical press sector is clear from its acquisition, in partnership with France's Havas, of Spanish medical publisher Doyma.) Meanwhile, Bertelsmann Professional Information got a new boss in Jürgen Richter, who will report directly to CEO Middelhoff in Gütersloh. In a no-nonsense divestiture, bowing to the difficulty of making money in the present-day cartography sector, on December 1, Bertelsmann sold off its map publishing activities grouped under the Falk imprint.
In addition to the professional sector, the book product group now consists of four divisions -- publishing and direct marketing for Germany, Austria and Switzerland; clubs in the same language area and Eastern Europe; book and club activities elsewhere in Europe; and the expanded American business -- for a total payroll of some 18,400 employees. No attempt was made to veil difficult market conditions in the sophisticated but saturated German market, where hopes now lie with Goldmann Verlag's growing market leadership in paperbacks, as well as the latest crop of hardcover bestsellers at logos such as C. Bertelsmann, Knaus and Karl Blessing, not to mention the recent acquisition of the Berlin Verlag quality list. Expansion in Latin America is underway, thanks to the Mexican extension of Barcelona-based Plaza y Janés, as well as via Bertelsmann's 60% stake in Sudamericana in Argentina and Chile.
In the sluggish club sector, the German and Austrian operations have strengthened their joint marketing, just as Italy's Euroclub will get a lift from the recently engineered strategic partnership with market leader Mondadori's own club. While the French club France Loisirs (a 50-50 venture with Havas) serves five million members in its language area and is holding its own in tough times, results are up both in Spain and the Netherlands. The Shanghai adventure now serves a membership base of 600,000 -- attracted by unprecedented personal courier delivery. As for the U.S., Doubleday Direct had another record year as North America's largest club group, with a total membership of 5.8 million.
