Bullish on
Crown
FROM PUBLISHING
TRENDS (FEBRUARY 2001)
Things
have not been pretty at the struggling discount chain
Crown Books — what with that bankruptcy filing
and all — and its latest SEC statement reads like the
script of Voyage of the Damned as adapted by
Alan Greenspan. By now you’ve probably seen the
financials (grim) and the roadmap to recovery (grueling).
For a different perspective, PT checked in with
the trade for a brief survey of Crown’s progress to
date.
“I
wouldn’t want to make any ‘forward-looking statements,’”
says Rick Richter, president of sales and distribution
for Simon & Schuster. “But the signs are
good. We’re certainly doing business with them.” Richter
says that with former Waldenbooks chief executive
Charles Cumello on board as CEO, a guarded optimism
is in order. “We have a lot of confidence in the team
assembled,” he says. “There’s a certain kind of book
that we all know Crown sells very well, and I think
Charlie has a good understanding of what that book is.”
Several major houses report that they are now selling
directly to Crown, although the chain’s continued reliance
on wholesalers has been problematic. “What we’re craving
from them is direct POS information,” an executive says.
“It becomes more difficult to track when they’re sourcing
through multiple vendors.” (During 1999, Crown purchased
94% of its books from Ingram; during the six
months ended July 29, 2000, that figure was down to
65%. The chain is aiming for 50%.)
“Our
business is up with Crown,” says a sales executive at
another major publishing house. “In their core markets
such as DC and California, they still have very strong
market share.” Observers also note that as deep discounting
is reined in at retailers such as Amazon.com,
conditions are ripe for the chain’s rock-bottom prices
to win back customers. “Crown has a good understanding
of how powerful discounting can be,” a sales veteran
explains. As a Crown ad once put it, poking fun at the
latte-driven culture of the mega-chains: “With the money
you save at Crown, you can buy your own espresso machine.”
Of course, optimism is in publishers’ best interests.
“We’re in an interesting climate, because there’s not
a lot of cavalry riding over the hill as far as new
stores opening,” Richter says. “It’s good for the business
that Crown gets back on their feet.”
©2001
Publishing Trends
