The August 1 transition date came and went quietly for the Perseus Books Group, with few complaints from clients or retailers over the integration of PGW into the existing Perseus operation. After it acquired the distribution contracts for 124 PGW clients, Perseus signed a transition services agreement with PGW parent company AMS, under which AMS would provide help in moving the business to Perseus. The contract ran through July 31, and although the two parties have extended a portion of it for another two months, for the most part Perseus is now operating PGW on its own.
“We feel good about the way it’s gone,” said Perseus CEO David Steinberger. “It’s gone pretty smoothly so far,” agreed Ray Riegert, head of Ulysses Press, publisher of the bestseller Mugglenet.com’s What Will Happen to Harry Potter. Munro Magruder, associate publisher of New World Library, also said things have moved along well, noting he is taking a “no-news-is-good-news approach to the whole transition.” Both Riegert and Magruder attributed the smooth move to Perseus’s decision to keep a large number of PGW’s staff. “That’s really helped as they go from one thing to the next,” Riegert said. Among the 68 PGW employees who have stayed on is Kim Wylie, who is continuing to oversee sales. Susan Reich, former president of Avalon and one-time v-p of marketing at PGW, took over as PGW president on July 30.
There have been a few unpleasant surprises, however. Because of the different ways PGW and Perseus process returns, Hawthorne Books was hit with three months of returns all at once; still, publisher Rhonda Hughes said that overall she was pleased with the transition.
Cleaning up the returns process is one of the top priorities for Perseus, said COO Joe Mangan. Part of the problem in straightening out the returns is that some accounts were slow to redirect returns from the PGW warehouse to Perseus, but Mangan believes things should be corrected in August. Other items on the to-do list include moving the remaining books in PGW’s Indianapolis warehouse to Perseus’s Jackson, Tenn., facility and migrating back orders from the Indianapolis system to Jackson’s. With the calendar turning to August 1, the “transition vendor” label that had been used to identify PGW books has been removed and all books are now part of Perseus Distribution Group. In addition, terms of sale for PGW and Perseus titles have been merged, permitting accounts to combine orders for discount.
Also effective August 1, Perseus began shipping all PGW orders from Jackson, where approximately eight million PGW books are sitting in their own warehouse. Perseus now has three warehouses in Jackson, operating under the direction of Chris Wagner, v-p of distribution.
The extension of the transition services agreement will give Perseus more time to decide whether to accept PGW leases in Berkeley and New York; Perseus has committed to having an office in the San Francisco Bay Area (which may house both PGW and Avalon employees), but has not yet decided where. A decision is expected before the TSA expires. Over the next two months, Perseus will also phase out the remaining services provided to the company by AMS, which now mostly involve IT work and customer service.
August 1 did not bring the PGW name to Perseus, although Steinberger said he still remains interested in acquiring the name. The next important date for PGW clients is August 7, the date their next statements—and checks—are due.
