A shift from the educational to the retail market and the hiring of a new president in 1995 helped set the stage for a rapid growth in revenues for the children's book publisher, Kidsbooks Inc. Over the last two years, sales at Kidsbooks have doubled, to more than $10 million, and company president Kevin Murphy predicted that sales will grow 30% annually over the next five years. Murphy, a former publishing consultant and author, was hired in 1995 by Kidsbooks co-founders Dan Blau and Vic Cavallaro and given the freedom to 'build the company the way I thought a publishing company should be built,' Murphy said.
A key to Kidsbooks' success has been its attention to price points. According to Murphy, all of Kidsbooks titles are designed to help its accounts sell-through product while providing retailers with good margins. Its retail prices range from $4.95 to $14.95 for hardcovers and 99 cents to $3.99 for paperback activity books. One way Kidsbooks keeps costs down is by selling nonreturnable to all accounts, which include bookstores as well as an array of mass merchandisers. Kidsbooks also avoids using wholesalers; its in-house sales force calls on bookstore accounts, while commissioned rep groups sell to the mass merchandisers. The retail channel now accounts for about 80% of sales; the balance comes from book clubs, book fairs and institutional accounts. The house currently publishes between 50 to 75 new titles a year, mostly nonfiction, with a limited number of fiction titles.
Another key to Kidsbooks' growth has been formats. In 1997, the company launched SoftPlay, a proprietary line of interactive soft cloth books for ages six months to three years. The company now has about 25 SoftPlay titles that have been developed though license arrangements with such companies as Fisher Price, the Jim Henson Co. and Warner Bros. Its most recent agreement was with Children's Television Workshop to develop a SoftPlay title based on Sesame Street's Elmo. Cavallaro estimated the SoftPlay line generated sales of $2 million in 1998 and projected that sales in the line will increase by $1 million this year.
Kidsbooks has also done very well wth its various Eyes On series. Its Eyes on Nature series, a line of 32-page hardcover titles, has sold more than seven million copies. Kidsbooks is adapting that concept to a supermarket continuity series called Nature's Wild, which will feature 16 titles. In June, Kidsbooks will ship the first four titles in its new Eyes on America series, which highlights famous people, places and events; the publisher has received an initial commitment for more than 1.5 million copies. Another consistent seller for Kidsbooks has been its Kidsbooks Fun Filled Question and Answer Books. The company has recently added Geography and 20th Century titles to its list, and received an initial order of 40,000 copies for the latter.
Kidsbooks joined the Internet world in 1998 when it launched kidsbooks.com. The site currently carries 100 of the company's 300 titles and expects all titles to be available on the site by the end of 1999. Murphy told PW its online strategy is to complement, not compete with, its retail customers.
Looking at the future, Cavallaro said Kidsbooks will do more products for children from birth to age three, and that almost every new product it develops will feature some interactive element. One of the first new books will be a lift-a-flap title that will include a night light. A new format to be launched this year is a board book and puzzle combination; the series will start with a line of Fisher Price Little People books. Kidsbooks also plans to add eight new titles to its Young Collectors' Illustrated Classics series. The series, designed for ages seven to 12, currently has 20 titles, including Frankenstein and Moby Dick. The company has curtailed its international expansion plans, citing exchange rate problems and tough competition.
The current year should see Kidsbooks add four to six people to its 15-person staff, and the publisher is looking for three people in editorial and a marketing manager for kidsbooks.com.
