Independently Growing

While internet start-ups and electronic publishing ventures captured the headlines over the past few years, a group of independent publishers have quietly established profitable businesses, overcoming difficult economic conditions in the book industry. The 14 companies highlighted in PW's eighth annual look at fast-growing small publishers managed to increase sales by an average of 43.5% between 1999 and 2001, a time span in which total trade sales fell 6%. Total net revenues for the publishers that made this year's list hit $65.3 million.

Unlike same other years, when a few publishers recorded sky-high sales increases (in 2000 Gallopade International reported a 600% sales increase between 1997 and 1999), the fastest growth rate for this year's crop was 100%, a very respectable figure, but well short of Gallopade's performance. The hallmark of this year's small-publisher standouts was their ability to improve their productivity by developing programs that deliver consistent growth from a solid foundation. A particularly notable trait among several publishers was significantly increasing sales without adding staff. And a few companies were able to increase revenues without increasing titles. For example, even though New World Library added two employees between 1999 and 2001 and cut its title output from 38 to 36, it produced a 75% sales increase. "We're obviously getting higher sales per title," associate publisher Munro Magruder says. He further notes that a profit-sharing program for all employees has made New World a very productive company, with sales per employee topping $500,000. Chicago Review Press has seen its sales increase from $2.0 million in 1999 to $3.1 million in 2001 while keeping its staff at eight. "We make the most of the sales and marketing feedback we get from our distributor, Independent Publishers Group," Linda Matthews, Chicago Review publisher, says. (Chicago Review is a sister company of IPG.). Gibbs Smith cut the number of books it published from 53 in 2000 to 51 in 2001. "We're keeping production fairly stable," says general manager Christopher Robbins. "We're looking for additional sales by doing a better job of repackaging and refreshing our backlist as a way to increase our return on investment."

One area that independent publishers have always closely monitored is print runs, in an effort to ensure that they are not surprised by returns. "Heavy returns of one book can wipe you out," the head of one small publisher notes. Walter Pierce, sales director at Sports Publishing, says the company's return rate averages between 13% and 14% annually. The company's small sales staff "will talk down" accounts who they think are over ordering, he explains: "We want to get real numbers." Jack David, one of the founders of Canada's ECW Press, says he prefers the "creep up" method: ECW typically advances only about 2,000 copies per title, but then fills reorders quickly. "It's all about getting the right information," David says. Ibooks Inc. founder Byron Preiss also favors keeping print runs low until a title takes off. "The fewer copies you send out, the fewer that can back," he reasons.

David Pallai, president and founder of Charles River Media, is not worried about returns this year, noting that his company's market is small enough that Charles River can carefully monitor how its books are selling through. Strong sell through has also kept returns stable at Gibbs Smith. Robbins says sell through was especially good at Borders last year, which he attributes to the publisher's ability to promote its titles at the chain.

When Michael Kerber and Jan Johnson bought Samuel Weiser Inc. (now known as Red Wheel/Weiser) in December 2000, they discovered that the return rate was 3%, a percentage sales and marketing director Chris Wold says was too low. "They may not have been getting enough books into the market," Wold says. The return rate has gone up slightly since Kerber and Johnson acquired the company and is likely to move higher following the first sales of a book into the price clubs. But the possibility of more returns is a chance Red Wheel is willing to take to spur maximum growth.

The Leaders

The two fastest growing publishers among this year's standouts are Sports Publishing L.L.C. and Charles River Media, both of whom doubled sales in the last two years.

Sports Publishing's growth was concentrated in 2001, when the company released what proved to be the two biggest sellers in the company's history. Early in the year, Sports Publishing published Dale Earnhardt: Rear View Mirror by editors at the Charlotte Observer, a tribute to the legendary race-car driver who died in a crash last February. There are more than 220,000 copies of the book in print. Late in the year, the company adapted its model of publishing books on successful sports teams and personalities to produce America's Heroes: Inspiring Stories of Courage, Sacrifice and Patriotism, which now has more than 600,000 copies in print and was the company's first New York Times bestseller. Heroes has played an important role in Sports Publishing's development. Cash from the title's sales ensured that the company could print and ship its entire 2001 list on time, which at 69 titles was its largest ever. In addition, the book "got the attention" of independent booksellers and other accounts who had not carried the company's titles, says sales director Pierce. "It gave us more of a national profile," Pierce adds. Also helping to expand Sports Publishing's reach was the victory of the New England Patriots in the Super Bowl. The publisher's Patriots' Day, about the Super Bowl champs, opened doors to more East Coast outlets. Heroes and Patriots' Day have helped Sports Publishing get off to a very strong start in 2002. The company plans to release 85 to 90 titles in 2002 and is projecting a 25% increase in sales. Among its titles set for the year are a biography of Barry Bonds, Ted Williams: Pursuit of Excellence and Golden Voices of Baseball, the last two coming with a CD.

Charles River specializes in computer books with a focus on computer graphics and game development. "We do books large publishers won't touch because the market is too small," company president Dave Pallai says. He attributes Charles River's recent success to a general expansion of its list, including the launch of CyberRookies, a series geared to tech-savvy teens. The company also benefited from an agreement with Delmar Publishers to distribute Delmar's titles to the education market. Top sellers last year included Game Programming Gems and Web Design and Development. Pallai is looking for sales to double this year.

The basis for New World Library's 75% increase was laid with its January 1, 2000, merger with HJ Kramer. Under the agreement, New World acquired Kramer's backlist and assumed all functions for new Kramer books except acquisition and the editorial process. The strength of the New Age publisher is its backlist, which accounts for 70% of sales annually. The most recent addition to its backlist is Eckhart Tolle's The Power of Now, which has sold about 250,000 copies since its October 1999 release. New World's books also do well in alternative channels, with 25% to 30% of its revenues generated in the gift, health food and mail-order markets. Munro Magruder is looking for another good year in 2002, with sales up in January and February. Magruder is also excited about the agreement New World has reached with the Joseph Campbell Foundation to be Campbell's official publisher. Thou Art That has sold 20,000 copies since its release in late 2001. Plans call for New World to release three titles a year—two reissues and one new title, including The Collected Work of Joseph Campbell featuring unpublished and out-of-print Campbell works.

Sleeping Bear Press's 58.5% growth over the last three years has been fueled by a dramatic increase in its title output, which rose from 12 in 1999 to 47 last year. Owner Brian Lewis says he has been able to up the production levels because of the success of early titles, which have formed a strong backlist. The Legend of Sleeping Bear, for example, was released in 1998 and has been a steady seller, along with several of the company's other children's books. The stellar performer in 2001 was Devin Scillian's A Is for America, which was first published in May and now has about 300,000 copies in print and continues to sell at a rapid clip, Lewis says. Sleeping Bear has also had some good luck with its few fiction titles. The Greatest Player Who Never Lived has sold more than 40,000 copies, and film rights were acquired by Miramax. Lewis is optimistic that the movie rights to last year's novel, Flat Bellies, will be picked up, and has high hopes for Take Dead Aim, which will be released later this year. On the small screen, Sharon Randall's Birdbaths and Paper Cranes is being considered for a television pilot, and the publisher will release a collection of Randall's newest columns this fall. In May, Sleeping Bear will publish Scillian's second children's book, One Nation, for which a 100,000-copy first printing has been set. Lewis's goal for 2002 is to improve the company's penetration in bookstores. "It's been a bit of a weakness," Lewis admits. To help achieve that goal, the company recently hired its first national accounts manager and will attend its first BookExpo America this May.

Chicago Review Press's Linda Matthews attributes the steady growth of the company to gains across Chicago Review's three imprints. The flagship imprint publishes general nonfiction books and an expanding line of children's activity books. Lawrence Hill Books specializes in nonfiction books aimed at the African-American market, while the A Cappella imprint focuses on books in music and film. Matthews was very encouraged by the sales of the publisher's children's books last year as the company enjoyed higher sales through school book clubs, libraries and catalogues.

After beginning as a scholarly and reference publisher with a focus on Canadian writers, ECW Press, with offices in Toronto and Montreal, has shifted its orientation to trade books. Biographies of celebrities have become a staple for the company whose backlist includes titles about Angelina Jolie, Jennifer Lopez and Tom Waits. A new book about Frank Zappa is expected to do well this year. Pop culture is another important niche for the company, and ECW has sold 60,000 copies of The Dave Matthews Band: Step into the Light. ECW has also done "lots of books on wrestling," cofounder Jack David says. "We try to publish titles where there is an existing fan base." In a nod to its roots, ECW publishes eight to 10 poetry books a year. The U.S. constitutes about 60% of ECW's total sales, with 30% generated in Canada and 10% coming from the U.K. and rights sales. In January, ECW switched its American distribution from the LPC Group to IPG. "We're a better fit with IPG," David says, adding that he is projecting a 20% to 25% increase in sales in America this year. He is especially high on the prospects for the company's Secret Guides travel line. With books covering several major North American cities already in print, David says he is hopeful that the series "is at a point where it is becoming recognized" by retailers and consumers.

Audio Partners is the sole spoken-word audio publisher to make PW's list this year, not surprising given the tough operating conditions for independent audio companies. Audio Partners' Michael Taylor says the company's gains have been mainly due to its strategy of releasing "classic British mysteries," including a line of Agatha Christie titles, which did very well last year. Audio Partners also had strong sales of To Kill a Mockingbird. To boost sales, the company is trying to do more business with audio book clubs to counter the lack of retail shelf space. "Retailers need to do something to better merchandise their audio sections," Taylor says, "but I'm not counting on it." Still, Taylor is optimistic about 2002, pointing to an Alice Munro title and Touch the Top of the World as possible strong sellers.

ESRI Press is easily the most unusual publisher to make the PW list. An imprint of ESRI Inc., the company publishes books and software related to geographic information systems. Steve Hegle, who heads up the sales effort for ESRI Press, says the company's titles are divided into three areas: case studies that focus on how GIS works in specific industries; GIScience, which features white papers that discuss the theory of GIS; and textbooks. The college market is ESRI's largest sales channel, although the trade accounts for about 20% of revenues. "We're trying to build awareness of what GIS is," says Hegle (simply put, it provides the basis for most mapping software applications). Books headed for the trade this year include GIS Means Business; Past Time, Past Place; and Mapping Our World.

"Home and hearth" continues to be the core niche for Gibbs Smith, Publisher. According to Christopher Robbins, five of the company's titles made the top 50 list of home and hearth books at Barnes & Noble last year. Books about bungalows have been especially popular, Robbins says, and the publisher has also done well with a book on French design called French Influences, which was released late in 2001 and has sold more than 20,000 copies. A surprise hit was the $6.95 paperback A Biker's Guide to Life, which has sold about 40,000 copies. Although Gibbs Smith is based in Layton, Utah, it shied away from doing books about the Olympics. It did have some success, however, with First Tracks, a coffee-table book about skiing in Utah. The company's textbook division, which specializes in state history books for elementary school children, had a 30% sales increase last year. There are 14 states in the series and Gibbs Smith will add three more this year and five in 2003. Robbins is also looking to expand the company's gift division this year. "One of our strengths has been our relationships with independent accounts, including gift stores. We have lots of materials that are appropriate for the gift market, and we want to leverage that asset," Robbins says. Gibbs Smith will start by producing note cards, and Robbins estimates that about 20% of the company's production in 2002 will go toward developing gift items.

Red Wheel/Weiser expanded on a number of fronts in 2001 and will continue its aggressive agenda in 2002, spokesperson Chris Wold says. Sales in 2001 were helped by the launch of the Red Wheel imprint, which had a hit with Spirit Maps. The repackaging of a Weiser backlist title, The White Magic Book, as a gift item did well last year. Red Wheel also has been more aggressive with its print runs, upping them from a range of 3,000—5,000 copies to 5,000—10,000 copies. Wold is forecasting a 25% sales jump for 2002, which will include an increase in the number of titles to more than 70, a figure that includes its distribution clients. In addition, Red Wheel is more active in the sub rights field, including working with book clubs. A major push into specialty markets is also planned for 2002. Further into the future, an acquisition is possible, Wold says.

Backlist has formed the backbone of Berrett-Koehler Publishers' success, with several titles piling up impressive numbers over a relatively short period of time. Among its top sellers are Leadership and the New Science (more than 250,000 copies sold), Love 'Em or Lose 'Em (over 230,000 copies sold), Repackaging Your Bags (over 240,000 copies sold) and When Corporations Rule the World (more than 100,000 copies sold). Frontlist titles that moved well last year included Divine Right of Capital, released late in the year, and Affluenza, a surprise hit that sold 20,000 copies. Although business books remain B-K's core segment, the company has broadened its list to include books on environmental issues, current affairs and personal development. The company has had some success selling its titles into the college market, and Ken Lupoff, publicity manager for B-K, says one of the company's big books for this year, Alternatives to Economic Globalization, could do well at schools. B-K is distributed by Publishers Group West, and Lupoff is hopeful that with PGW's recent acquisition by Advanced Marketing Services, its titles will gain exposure at such AMS accounts as Office Depot and Costco.

Originally a reprint house, Kregel Publications has made a concerted effort to move into new frontlist areas, including the Christian academic and children's markets. With the addition of some distribution clients, Kregel has been particularly successful in the children's market, where it now publishes and distributes about 40 titles, and plans are underway for a new children's imprint. The company is also looking to expand into the ABA marketplace and already has crossover hits with Lethal Harvest and Divided Loyalties. A new book about Islam set for spring release should sell well in the general market, Kregel's Dave Hill says. In addition, the publisher is making plans to revitalize its Spanish-language imprint. Founded more than 15 years ago, Editorial Portavoz publishes popular Spanish religious titles for the U.S. and abroad. The imprint has been dormant for about a year while management decided its future plans, but will now move ahead with the program.

The recent success of Fantagraphics Books has been "something we've been building toward for a long time. We now hope to keep rolling," says the company's Eric Reynolds. The publisher of graphic novels has published works by such artists as R. Crumb, Gilbert and Jaime Hernandez, Dan Clowes and Joe Sacco. Among its better sellers last year were Ghost World and Palestine. But the key to the company's success in 2001 was switching distributors from Southern Hills to Norton. "We saw an immediate jump" when Norton took over distribution, Reynolds says. Fantagraphics' titles "are more in tune with Norton's list," he adds, and the company had the clout to get Fantagraphics' titles into more accounts. With Norton's help, Reynolds is looking for solid gains this year, when its titles will include a biography of Martin Luther King Jr. and a collection of Krazy Kat strips.

The majority of National Academy Press titles are from the national academies: the National Academy of Sciences, National Academy of Engineering, Institute of Medicine and the National Research Council. While most are geared for the professional and scholarly market, some titles cross over into the trade area, usually via Amazon.com, says publicist Robin Pinnel, citing Crossing the Quality Chasm as a recent example. To help make books about science, technology and health more accessible to the general public, NAP formed the Joseph Henry Press trade imprint in the mid-1990s, although the line did not really hit its stride until last year, when it published 13 books. One Universe, with sales of 24,000 copies, was JHP's top seller last year, and 2002 is off to a good start with the release of Secret Agents, published in February with a 30,000-copy first printing. Pinnel says plans are to keep the JHP list to between 12 and 14 titles annually, "so we can give each book the attention it deserves." While the trade imprint has helped lift sales, Pinnel says a major factor has been the NAP's Web site (nap.edu), which has more than 2,500 titles that can been browsed for free. According to Pinnel, the site allows customers to search the press's list for books that may be relevant to their particular needs.

PW's Small Publisher Standouts