Sher Distributing, a New Jersey wholesaler that served a range of mass market publishers, filed for bankruptcy last month and will shut down operations over the next several weeks.
Sher was one of the biggest wholesalers in the ID market, fulfilling mostly paperbacks to mass merchandisers, drugstores and other special-sales accounts. At one time, it employed more than 1,000 people and claimed over $100 million in revenue. A call to the company was not returned by press time.
Some industry members pointed to the bankruptcy of K- mart, Sher's biggest client, as the reason for the wholesaler's recent problems, along with weak sell-through in drugstores. The consolidation of the ID business over the last few years was another contributing factor. Although Sher survived the dramatic consolidation of ID wholesalers in the late 1990s, it was one of the last purebreds; unlike Levy and other giants, it distributed only books and had trouble keeping up with those that also sold wider-margin products like magazines.
Publishers affected by Sher's shutdown have been scrambling to find new wholesalers and are looking for ways to minimize the financial damage. Several publishers said they don't expect to recover much of the money owed them. Said the head of one paperback house: "It's going to hurt. We're trying to ascertain how much."
