Random House is "well positioned to reach our ambitious [financial] targets for fiscal 2002," company chairman Peter Olson wrote to employees in his midyear report. For the first five months of 2002, Random is "significantly ahead" of the comparable period in 2001, Olson said. He said Random was able to rebound from the soft performance in the second half of 2001 (News, June 17) because "of the preeminence of our publishing program and our sharp focus on our cost-reduction efforts."
Among the benchmarks Random uses to gauge its performance is the number of New York Times bestsellers; the company had 108 titles on the various Times lists in the first half of the year, including 12 number one bestsellers. In addition, between January and June, Random shipped more than one million copies each of seven titles, as well as shipping between 500,000 and one million copies of 15 titles. Olson also reported that reorders in its core backlist categories were strong in most segments, while e-book revenues in the first quarter hit a record high.
On the cost-reduction side, Olson said the companywide restructuring program "had an immediate major impact on our bottom line." He added that while the cost reductions have been completed, "cost consciousness has to be a permanent way of life at Random House." Earnings have also been helped by a return rate that is "way below our targets," Olson said.
Despite the good start to the year and a very strong fall list, Olson said Random faces some "interesting challenges," citing in particular an "unpredictable" retail environment and an "uneven" economic recovery. The uncertain marketplace in the aftermath of September 11 makes "sell-through growth for books extremely vulnerable to further threats to our security and economy," Olson said.
