Indigo president resigns as profits fall in third quarter

After less than a year in the role, Tedford G. Marlow has resigned as president of Indigo Books & Music and resumed a senior position with U.S.-based retailer Urban Outfitters, where he has been named CEO.

The move, reported by U.S. business media last week, was confirmed by Indigo in its third-quarter results, which saw revenues increase slightly for the period ending Dec. 31 (to $353 million) and profits decline (to $24 million, down from $27 million for the same period in 2010). Marlow assumed the role of Indigo president in April, replacing Joel Silver, who now leads Trilogy Growth, an investment firm affiliated with Indigo’s majority shareholder, Trilogy Retail Enterprises.

Marlow’s tenure at Indigo was brief but controversial, at least among members of the book trade. Under his stewardship the retailer introduced a new line of lifestyle products that competed with books for floor space. Behind the scenes, Indigo imposed new terms that many publishers have struggled with, including a 4 per cent co-op surcharge on all books sold through the chain and a shorter turnaround time for returns.

Marlow also oversaw the sale of Indigo’s ebook division, Kobo, to Japanese software firm Rakuten, a deal that netted Indigo $146 million (U.S.) when it closed last month.

In its Q3 report, Indigo reported double digit increases in its gift, lifestyle, and toy lines, as well as marginal revenue increases at its Chapters and Indigo superstores (up 1.8 per cent) and its small-format IndigoSpirit and Coles locations (2.5 per cent). Online sales increased by 9.3 per cent compared to last year.

Indigo CEO Heather Reisman attributed reduced profits to “lower gross margins as a result of increased promotional discounts to drive print sales and increased sales of low margin e-readers.”

She added in a press release: “This margin impact has not yet been offset by expected growth in the gift, lifestyle, and toy businesses. The Company also recorded a $4.0 million non-cash asset impairment charge during the quarter. Excluding this charge, net profit increased $0.7 million.”

Ling Zhang responds to accusations of plagiarism

This week, the controversy dogging Chinese-Canadian author Ling Zhang’s second novel, Gold Mountain Blues, flared up again as prominent Chinese-Canadian authors Wayson Choy, Sky Lee, and Paul Yee signed a letter asking Penguin Canada to delay publication of its English-language translation of the book. Zhang has been accused of plagiarizing work by Choy, Lee, and Yee, as well as other well-known Chinese-Canadian writers. In their request, the trio criticize Penguin’s efforts to substantiate the accusations and they’ve asked for the delay so that an independent review might take place. (For more details on the controversy please follow the links to previous posts on Quillblog.)

In response, Zhang has issued a statement in which she claims not to have read the works from which she has allegedly borrowed, and expresses her disappointment at the recent turn of events:

Gold Mountain Blues is the result of years of research and several field trips to China and Western Canada. The research data obtained over the years is voluminous enough to allow me to write another complete novel if I chose to. A hundred and fifty years of Chinese-Canadian history is a “common wealth” for all of us to share and discover. I have not read The Jade Peony, Disappearing Moon Café, The Bone Collector’s Son, or Tales from Gold Mountain. I have a great respect for the authors who have already explored this rich territory before me: Wayson Choy, Denise Chong, Paul Yee, and Sky Lee.  I welcome and encourage authors interested in Chinese-Canadian history to do the same. When I started to write this book, I hoped it would serve to bring the Chinese-Canadian community a little more closely together, by sharing such a long and meaningful history.  I am deeply saddened to see that things do not seem to be going in that direction.

Cormorant Books partners with Thomas Allen & Son: UPDATED

Toronto-based literary publisher Cormorant Books, has entered into an agreement with Thomas Allen & Son that will see Thomas Allen take over Cormorant’s sales and distribution as of July 1. According to a joint press release, Thomas Allen will also become a minority shareholder in Cormorant.

No staffing changes will be made at either company, but the press release says the new arrangement will allow for “intellectual collaboration” between Cormorant and Thomas Allen Publishers, the publishing arm of Thomas Allen & Son, that will result in “significantly increased visibility in the marketplace.”

Marc Côté, the publisher of Cormorant, bought into the company in 2001, when it was part-owned by the now-defunct Stoddart Publishing. Along with John Pugsley, Côté purchased Stoddart’s shares in December 2002. He is quoted in the press release as saying, “I have long admired [Thomas Allen president and CEO] Jim Allen’s business savvy and [Thomas Allen publisher and editor] Patrick Crean’s editorial vision. The future for Cormorant Books appears very bright, thanks to this new partnership.”

For his part, Crean predicts the new arrangement will have a net benefit for both companies. “In a period of transition in book publishing, this timely alliance will enhance both our lists by creating greater intellectual depth editorially, as well as drawing on a wider range of publishing resources.”

Keep watching Q&Q for more details on this story.

This post contains material that has been updated. An earlier version of this post misstated the process by which Marc Côté acquired shares in Cormorant Books. Q&Q regrets the error.

Publishing at the polls: Arts and culture platforms

Tonight is the first televised leadership debate of the federal election. It’s unlikely arts and culture will be mentioned, so here’s a primer on how all parties (including the Green Party) stand on issues that impact the publishing industry. Here’s a summary of points, taken directly from each platform:

Bloc Québécois

• Ensure that the federal government increases its support for our culture and contributes to its development

Conservative Party

• We will provide ongoing support for the Canada Periodical Fund to support the distribution of publications to Canadians, while providing long-term, stable program funding
• A Stephen Harper-led majority Government will also reintroduce and pass the Copyright Modernization Act, a key pillar in our commitment to make Canada a leader in the global digital economy. This balanced, common-sense legislation recognizes the practical priorities of teachers, students, artists, families, and technology companies, among others, while aligning Canada with international standards. It respects both the rights of creators and the interests of consumers. It will ensure that Canada’s copyright law will be responsive in a fast-changing digital world, while protecting and creating jobs, promoting innovation, and attracting investment to Canada

Green Party

• Increase funding to all of Canada’s arts and culture organizations including The Canada Council for the Arts, Telefilm Canada, orchestras, theatres and publishers. The goal will be to make increases in this sector commensurate with increases in support over the years for other sectors of the economy such as transport, the auto industry, health care, and the oil and gas industry
• Restore and improve arm’s length principles in the governance of arts and cultural institutions and agencies under the federal jurisdiction.  In keeping with such a position, we believe that the heads of Canada’s cultural organizations such as the CRTC, Canada Council, CBC, and Telefilm Canada should not be appointed by the political party in power but by an arm’s length committee made up of competent people representative of the various diverse stakeholders in Canadian society
• Increase support for community arts programs and facilities across Canada by establishing stable base-funding at a set percentage of the federal budget
• Equalize federal funding for Arts and Culture among provinces, territories, and municipalities to make it consistent with the provinces and municipalities that have the highest current standards
• Provide incentives to all provinces and territories to restore and improve arts and culture components to schools and extra-curricular activities not only in urban but also in rural areas
• Extend income tax relief and incentives to artists (on the very successful models established by Ireland and the city of Berlin).  Doing so will: encourage artists to settle in Canada and build businesses here; result in other (usually) white collar “clean” industries that follow the arts jobs and dollars; help to provide meaningful jobs to university and college graduates;enrich schools and their offerings thereby attracting immigrants to settle in rural areas; revitalize and discover talent in communities where traditional industries are declining and young people are leaving
• Follow and implement recommendations of Canadian Conference of the Arts in order to enable artists to access various social programs including Employment Insurance, Worker’s Compensation, and Canada Pension Plan
• Change the Canada Revenue Act to allow arts and culture workers to benefit from a tax averaging plan that will take into account the fact that lean years often precede and follow the good year when a show is produced, a book is published and a grant or a prize is won
• Protect Canada’s cultural identity during trade negotiations

Liberal Party

• The Canada Council for the Arts is a major force in supporting working artists. A Liberal government will significantly increase support for Canadian artists and creators by doubling the annual budget of the Canada Council for the Arts, from $180 million to $360 million over the next four years
• A Liberal government will also restore the PromArt and Trade Routes cultural promotion programs, increasing their funding to $25 million. These programs play an important role in bringing Canadian culture to the world and increasing our exports. The new annual funding will help to create a domestic tours program as well
• Digital technology offers many new opportunities, but enjoying content without compensating its creators shouldn’t be among them. At the same time, consumers should have freedom for personal use of digital content they rightfully possess. Liberals have worked to pass effective copyright legislation, including a private copying compensation fund instead of any new tax on consumers

NDP

• We will promote the production and broadcast of Canadian content on Canadian television and in Canadian theatres, and will strongly support Canada’s performing arts, cultural institutions, and creators
• We will ensure Canadian TV and telecom networks remain Canadian-owned by maintaining effective regulations on foreign ownership
• We will increase public funding for the Canada Council and implement tax averaging for artists and cultural workers
• We will explore the creation of a new international arts touring fund to replace the now-defunct Trade Routes and PromArt programs
• We will develop a digital online culture service to broaden access to Canadian content
• We will introduce a bill on copyright reform to ensure that Canada complies with its international treaty obligations, while balancing consumers’ and creators’ rights

E-books will account for 40 per cent of book revenue within five years, predicts Reisman

Two years ago, Heather Reisman, CEO and “chief booklover” of Indigo Books and Music, predicted that e-books would cannibalize 15 per cent of traditional book sales at her stores  in five years’ time. Reisman has since revised that prediction. She now puts the figure at as much as 40 per cent.

The Globe and Mail‘s Marina Strauss interviewed Reisman about how Indigo plans to cope in a market in which e-books are gaining popularity faster than anyone had expected. How do traditional booksellers survive in a world in which a large minority of sales doesn’t require physical stock to move through the store? In a word, says Reisman, they don’t.

“In the book industry, when you are in a situation where you know that 40 per cent of your business is going to go digital – you need to change,” Ms. Reisman, chief executive officer at Indigo, said in an interview in her office, which she recently cleared of decorative penguin figures and other mementos in a nod to her company’s transformation in the digital age.

Her road map for the country’s largest book seller takes a detour from physical books. Indigo, like many book retailers worldwide, has a toehold in the digital books business, with a majority stake in Kobo. But in the stores, Ms. Reisman, who had a head start in envisaging Indigo as a “cultural department store,” is betting more than ever on other categories. Indigo is stepping up its offerings of tableware, toys and tote bags – even putting comfy chairs back in the stores, in the hope of stemming the tide of consumers abandoning the retailer for Web-based alternatives.

Strauss points out that although Indigo owns a majority stake in Kobo, the e-book retailer posted a loss last quarter, and Reisman doesn’t expect it to start turning a profit until at least next year. In the meantime, she is betting the house on the kind of product diversification that could make Indigo, in Reisman’s own words, “the world’s first lifestyle store for booklovers.”

Publishing at the polls: Copyright reform

As Canadians head to the polls on May 2, Q&Q looks at key federal policies affecting the publishing industry. Stay tuned for upcoming features on federal funding, mass digitization, and foreign-ownership regulations.

After nearly a year of parliamentary hearings and heavy industry lobbying, Bill C-32, the Copyright Modernization Act, succumbed to a sudden death on March 26, when the latest Canadian federal election was called.

For nearly a decade, publishers, authors, and other content creators have lived without a copyright act that takes into account the realities of a digital economy. Bill C-32 was the federal government’s third attempt to update the legislation. To get a sense of how outdated Canada’s current laws are, the last copyright reform, passed in 1997, instituted a levy on cassette tapes. It will now be up to the new government to table yet another copyright bill — and successfully get it passed for there to be meaningful reform.

As Canadians head to the polls once again on May 2, Q&Q spoke to several publishing copyright advocates about the lessons learned from Bill C-32.
(more…)

Johanna Skibsrud marks several firsts with Giller win

Johanna Skibsrud, the 30-year-old author of The Sentimentalists, became the youngest winner of the $50,000 Scotiabank Giller Prize on Tuesday night, and publisher Gaspereau Press became the first small press to win the award in its 17-year history. “It’s so exciting,” said Skibsrud after the win, her voice quaking. “I am in utter shock.”

Skibsrud, a Nova Scotia native who is currently a student at the University of Montreal (where she is working on a Ph.D. thesis about poet Wallace Stevens), based the debut novel on her late father’s experiences in the Vietnam War. She ended her short acceptance speech by thanking him for his encouragement and support. “I can’t even imagine how proud he would have been,” she said.

Described as “trip-wire taut” by Giller jurors Ali Smith, Claire Messud, and Michael Enright, The Sentimentalists began as the author’s M.A. dissertation in creative writing at Concordia University. According to Skibsrud, the book has subsequently changed a lot, and contains far more of her father’s experiences than originally planned. Though the senior Skibsrud succumbed to lung cancer in 2008, he had a chance to read an early draft of the novel and gave it his seal of approval.

The Sentimentalists is easily the most surprising Giller winner since the prize was first awarded in 1994, due mostly to its origins with the tiny Kentville, Nova Scotia-based Gaspereau Press. Published late in 2009 in a limited run of a few hundred copies, the book flew almost completely under the radar until the Giller jury named it to the prize longlist in September. In the lead-up to Skibsrud’s win last night, booksellers across Canada have had trouble getting hold of copies, because Gaspereau prints all of its titles itself and has a maximum capacity of about 1,000 copies per week.

“There definitely are times I wish [the book] was out there in more readers’ hands, but I know that Gaspereau has been working very hard to get copies in stores,” said Skibsrud, who has also published two volumes of poetry with Gaspereau. “They said they will keep up as best they can, and I have faith in them.”

Gaspereau co-publisher Gary Dunfield acknowledged that keeping up with demand has been a challenge. “We will print books as quick as we can, and that’s about all we can do,” he said, adding that he filled all outstanding orders to indie retailers just before heading off to Toronto for the ceremony. “[But] I don’t even want to think about what Friday’s going to be like.” (According to Dunfield, new orders won’t be fielded until Friday, as he won’t be back in the office until then and co-publisher Andrew Steeves is currently doing repairs on his house.)

Shortly after the shortlist announcement, several larger publishers, including House of Anansi Press, approached Gaspereau about handling printing and distribution for The Sentimentalists, but Steeves turned down the offers, preferring to stick to the slow-and-steady approach. After Skibsrud’s win, Anansi president and publisher Sarah MacLachlan told Q&Q the offer remains on the table, should Steeves change his mind.

For her part, Skibsrud said she would welcome such a move. “Personally, I would absolutely support that decision,” she said. “My interest is simply to have the book read as widely as possible. But the business end of things is not up to me.”

Regardless of whether The Sentimentalists becomes widely available in Canada, the book is set to be published in the U.K. in March by William Heinemann, an imprint of Random House U.K. Earlier this month, Heinemann acquired U.K. and commonwealth rights (excluding Canada) to the novel from Skibsrud’s agent, Tracy Bohan of the Wylie Agency.

Readers who can’t wait to get their hands on The Sentimentalists can buy it as an e-book from Kobo, the Indigo-owned digital reading platform. As for Indigo itself, Gaspereau is currently shipping print copies to the chain, and patrons can expect to see them on shelves shortly. But Dunfield isn’t sending the bulk quantities Indigo usually requires. “The chains want you to send 2,000 to 3,000 copies, and then they’ll return 80% of them. That’s financially feasible for them, but it’s not financially feasible for me,” he said.

Skibsrud beat out prior Giller winner David Bergen’s The Matter With Morris (HarperCollins Canada) as well as several other dark horse candidates: Alexander MacLeod’s debut story collection Light Lifting (Biblioasis), Sarah Selecky’s debut story collection This Cake Is for the Party (Thomas Allen Publishers), and Kathleen Winter’s debut novel Annabel (House of Anansi Press). Each of the finalists took home $5,000.

THIS STORY HAS BEEN UPDATED: The original version of this story incorrectly attributed comments to Gasperau Press co-publisher Andrew Steeves. Q&Q regrets the error.

Ben McNally survives G20 intact

Toronto’s Ben McNally Books, located near the intersection of Bay and Richmond streets, was caught up in the thick of the G20 mayhem over the weekend, with protesters and police camped out directly in front of the shop on several occasions. In anticipation of the violence, proprietor Ben McNally closed the store for the weekend and placed a hand-written sign in the window reading, “Have a peaceful weekend everybody.”

Though windows were smashed in a nearby Starbucks, a 7-11, and the Bay, McNally’s store managed to make it through unscathed. Maybe there were some dedicated book lovers among the rioters?

Kids Can moves to new location

The Toronto-based Kids Can Press has moved from its former Birch Avenue location. The new address is:

Kids Can Press
Corus Quay
25 Dockside Drive
Toronto, ON
M5A 0B5

Davidar tells his side of the story

Former Penguin Canada president David Davidar has hit back at claims by ex-employee Lisa Rundle that he had sexually harassed her over a three-year period. Via his lawyer, Peter Downard, Davidar released a lengthy statement recounting the nature of his relationship with Rundle, insisting that it was a consensual one:

David Davidar has not sexually harassed anyone. He has not assaulted anyone. David Davidar had a consensual, flirtatious relationship that grew out of a close friendship with a colleague. He deeply regrets the hurt this has caused his wife.

Commencing in late 2005, Mr. Davidar and Ms. Rundle had offices next to each other at Penguin. They became friends.  At work, Mr. Davidar and Ms. Rundle spent significant time in each other’s offices. At Ms. Rundle’s invitation, Mr. Davidar played tennis with her at her tennis club. They went to a tennis tournament together. They attended the theatre together. They had lunches in restaurants together.

[...]

Ms. Rundle and Mr. Davidar kissed on two occasions. The first was in Ms. Rundle’s room at the October 2009 Frankfurt Book Fair referred to in Ms. Rundle’s claim. However, contrary to Ms. Rundle’s claim, Mr. Davidar did not bully his way into her room, nor did he force himself upon her. Ms. Rundle did not object when they kissed. After the kiss, Ms. Rundle said she wanted to take a nap, as she was feeling jet-lagged. She asked Mr. Davidar to wake her up in an hour.

Two days later, Mr. Davidar and Ms. Rundle went to dinner at a restaurant. After dinner, Mr. Davidar kissed Ms. Rundle again, this time in his hotel room. Ms. Rundle then left to spend the evening with a friend. The next morning, Mr. Davidar and Ms. Rundle returned to Toronto. Upon arriving, Ms. Rundle asked Mr. Davidar for a ride to her home, which he provided.

Ms. Rundle subsequently told Mr. Davidar that she had enjoyed their kisses in Frankfurt, whether or not they were ever repeated. She did nothing to convey to Mr. Davidar that his attention was unwanted.

The statement goes on to claim that Samantha Francis, another employee who filed an earlier complaint of sexual harassment against Davidar, told him that the human resources department had simply misunderstood an enquiry she had made about one of his comments, and that she wished to withdraw the enquiry against him.