Perseus Books Group's announcement last week that it will consolidate Consortium's back-office operations into its Jackson, Tenn., warehouse was greeted coolly by some clients while applauded by others who viewed the development as a necessity in today's competitive marketplace.
Under the reorganization, Consortium's 15-person sales and marketing team will remain in St. Paul, Minn., under the direction of president Julie Schaper. By March 1, all warehousing functions will move to Jackson, home of CDS, now called Perseus Distribution Services. Consortium CEO Don Linn will leave the company by the end of the year, and 30 other employees will be let go.
Dan Simon, publisher of one of Consortium's largest clients, Seven Stories Press, said that Perseus's decision to consolidate back-office operations while maintaining the integrity of Consortium's sales and marketing force "shows they'll be creative about following both tracks at the same time. I'm very encouraged by how they're doing this."
Other Consortium publishers PW contacted were more ambivalent, saying they are adopting a "wait-and-see" attitude, hoping their concerns will be addressed at next month's sales meetings in New York, expressing fears of more changes to come that may be even more unsettling. None of them admits to plans to leave Consortium, but a few are investigating other options, although one press characterized its alternatives as "dismal."
"My preference is to remain with Consortium, but it would be irresponsible of me to not look around, with all these changes going on," said one publisher, who spoke on the condition of anonymity.
A number of the publishers expressed concern that 30 Consortium employees were laid off with four to six months' notice only a few months after David Steinberger, the president and CEO of Perseus, had assured them there would be no immediate major changes to Consortium's business model or to its staff.
"We all knew that changes would eventually happen," said Michael Wiegers, executive editor at poetry publisher Copper Canyon, which has been distributed by Consortium since the distributor first opened its doors more than 25 years ago. "But this, coming so quickly, makes me nervous, especially when you consider layoffs of people who've been there for 20 years."
"It's important to me to know there's a place like [Consortium] that values romantics and dreamers," Wiegers added, while discussing Consortium's culture. "There's a lively mix of personalities because Consortium values diversity. I hope this continues as Consortium moves forward under Perseus."
"When I joined Consortium, it felt like a family," Allan Kornblum, the publisher of Coffee House Press, declared. "But that's over. The family feeling is gone. It's just business now."
However, publishers like Sarah Gorham of Sarabande Books admitted that Consortium had outgrown its storage capacity, and that a move to a larger facility was necessary. She described being encouraged by Consortium personnel on two separate occasions to liquidate stock because there wasn't warehouse space available. "Sure, I'd like more space, but not at the expense of layoffs and the departure of Don Linn. This is big, it's really upsetting," she told PW.
Some of the anxiety over changes at Consortium stems from a perception that CDS cannot provide the same high level of customer service and order fulfillment that Consortium has.
An executive at one Consortium client who has spoken with publishers and booksellers about CDS described her findings as "bad news."
When PW contacted half a dozen CDS client publishers, most of them expressed satisfaction with the company, although some mentioned disruptions in service and order fulfillment during a period of transition after Perseus acquired CDS last year. A few publishers, however, characterized CDS as not only lacking enough staff but also lacking knowledgeable employees since Perseus bought CDS. "They should get their house in order before they take on new clients," one publisher said.
For his part, Steinberger insisted that Perseus is committed to uninterrupted service during the next four months, promising to add warehouse staff, customer service reps and finance reps to the current staff already in Jackson.
"We announced this early, so we could have a four-to-six—month planning process," he declared, adding that Perseus is providing the laid-off employees with generous severance packages.
"We were running out of warehouse space in St. Paul and the lease was up. It was a difficult step to take, but a long-term step in making Consortium grow was to keep sales and marketing in St. Paul and move the others to Tennessee," he said.
