Millbrook Press, struggling to create a firm niche for itself in the children's publishing market, is undergoing a restructuring that company president Dave Allen said will capitalize on the strength of its Roaring Brook Press imprint, while maintaining its position as a publisher for the school and library market. Allen said continued softness in the institutional market, where sales fell 8% in the first six months of fiscal 2003, made it necessary to reorient the company.
As part of the restructuring, Allen is phasing out Millbrook's Copper Beech imprint and will not renew its distribution agreement with Magic Attic when it expires May 31. The company's publishing efforts will now be centered in the Roaring Brook, Millbrook Press and Twenty-first Century imprints. When the new publishing program is fully implemented in 2004, Millbrook Press will publish about 130 titles annually—40 at Roaring Brook, 50 at Millbrook and 40 at Twenty-first Century—down from a peak of 200 titles. With the reduction in titles, Millbrook Press is eliminating 13 of its 50 positions, although Allen said he expects to hire two new people as part of the realignment.
The major change in the ongoing publishing programs will be at the Millbrook imprint, which will not only cut its list, but will also produce a higher percentage of titles that can be sold into the trade channel as well as the school and library market. Allen said Roaring Brook has been very successful in simultaneously releasing titles to both the trade and school and library markets and that he hopes to duplicate that success at Millbrook. The Twenty-first Century line will remain geared to the school and library market. Allen said Millbrook Press will continue to sell the Copper Beech backlist and will publish some of the science and math titles the imprint specialized in via the Millbrook imprint.
The restructuring is occurring in the face of declining sales and higher losses. Sales for the second quarter ended January 31, 2003, fell 41%, to $2.5 million, and the net loss increased to $475,000 from $257,000. The decline in sales was expected following Millbrook's decision last year to stop distributing the Snappy product line. While Millbrook is taking a short-term hit from dropping the line, Allen said it was the right decision for the long-term prospects of the company.
For the first six months of the year, sales dropped 39%, to $5.9 million, and the net loss rose to $951,000 from $108,000.
The combination of declining sales and growing losses has put Millbrook in violation of certain bank covenants. Allen said he is hopeful that the bank will grant Millbrook a waiver, something it has done in the past. Allen acknowledged that Millbrook faces a difficult 12 months as the new programs are implemented, but he is confident the changes will make the publisher a stronger company.
