Anthony Forbes Watson, CEO of Penguin and Dorling Kindersley UK, has been ousted from the company in the wake of a major distribution failure and Penguin UK's poor business performance overall. Penguin chairman John Makinson will take over the chief executive responsibilities on an interim basis.
It is widely believed that Forbes Watson's departure was a result of the systems failure at Penguin's distribution center in Rugby last year and the company's subsequent disastrous financial performance. Forbes Watson had worked at Penguin for 15 years, eight as its chief executive.
In the first half of last year, adjusted operating profits at Penguin fell 52% as a result of a drop in sales. Penguin's books were not reaching the stores and Penguin spent an approximately additional £15 million on distribution. In addition, authors suffered diminished royalties on lost sales; there was a call from the U.K. Society of Authors demanding extra payments from Penguin to cover lost earnings.
Makinson attributed Forbes Watson's departure to "genuine differences of view on the way forward for the Penguin and DK businesses." Pearson denied speculation that the departure was a sign that Penguin is for sale.
