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Solid Penguin Gains
Jim Milliot -- 8/7/00

Sales at the Penguin Group rose 8.5% in the first half of the year to $459 million, while operating profits increased 12% to $57 million. Penguin had 25 hardcover bestsellers in the U.S. in the first six months of 2000 compared to 20 in the same period in 1999; paperback bestsellers jumped from 14 to 33. David Wan, Penguin Group president, said that results at Penguin Putnam were "in line" with gains posted by the entire company. In addition to an increase in the number of bestsellers, Wan said sales of backlist titles "held up well" and that sales of mass market paperbacks were good. The U.S. children's division had "nice growth," Wan reported. Sales for all segments have been boosted by the Internet, and Wan estimated that the Web will account for 8% to 9% of Penguin's sales in 2000.

Penguin's earnings were helped by cost savings resulting from the integration of Penguin Putnam's warehouse operations, which were completed this spring. Wan said shipping glitches have been corrected and that the company is shipping books on a timely basis. He told PW that next year Penguin has budgeted for a major upgrade in its warehouse management system that will be done in conjunction with improving systems throughout the company.

Penguin Putnam is expecting a strong second half of the year, with new books by Tom Clancy, Patricia Cornwell, Dick Francis, Ken Follett, Alice Hoffman and Dave Pelzer set to be released.
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