Revenues at Harlequin rose 1.6% to C$154.3 million for the third quarter ended September 30, 2001, according to parent company Torstar. Operating profit at the publisher increased 1.7%, to C$29.7 million. For the nine-month period, sales dipped 0.4%, to C$435.1 million, but operating profits were up 7.8%, to C$85.9 million, and Torstar chairman David Galloway promised that Harlequin "will make more money in 2001 than it did in 2000."
In the quarter, results in North America were flat, as higher retail sales were offset by lower direct-marketing earnings. The company said that on the retail side sales were up for Harlequin's single title and series businesses, but that higher postage and distribution costs had hurt results in direct mail. In addition, part of the direct-marketing business has migrated to eHarlequin, the company's online book club. EHarlequin added 123,000 members in the quarter and its membership is now more than one million. Sales in the quarter rose by C$1.4 million, and the unit's operating loss was cut to C$1 million from C$6 million in the third quarter of 2000. The reduction in losses was largely due to a C$4 million decrease in marketing expenses in the period.
Another Harlequin unit that drained earnings in the quarter was the creativity division, which lost C$1.5 million, compared to a profit of C$300,000 in last year's third quarter. Lower sales in the Curiosity Kit business accounted for most of the decline, and executives said they were "disappointed" by the performance of the unit.
Executives said they had not seen much of an impact on Harlequin's sales following the events of September 11, but noted that they are taking a cautious approach toward a large mailing planned for December. But executives think Harlequin's fourth quarter will "at least match" the publisher's fourth quarter in 2000.
