In one of the darkest years of the 1930s depression, Allen Lane founded Penguin with the — then groundbreaking — notion to sell quality writing as cheaply as a pack of cigarettes and to sell them everywhere.
Studying our own history gives us pause for thought as we tip headfirst into recession: bleak economic times are sometimes the crucible of inspiration and creativity. I think of the black box theatres so beloved of Peter Brook and endless student productions, in which limited resources became the spur to imagination. And I compare that to a particularly bloated production I once saw where just one effect must have cost thousands of pounds, scores of unionised man-hours and added precisely nothing of meaning or value to the piece.
When I say we're ready and inspired to take the challenge of an economic downturn, I don't just mean cutting a few long lunches, but having a vision and being fleet of foot enough to respond to changing market conditions. Historically, the publishing industry thrives on such challenges. I think I've said in a previous blog that for an "old" industry, we're pretty responsive and innovative. We have to be.
Our customers are still there and a book remains fantastic value for money. Apparently at such times we skew more toward escapist fare, rather like the cinema goers in the 30s flocked to gangster films, musicals and screwball comedies. When the Canary Wharf Waterstones opened the day after the collapse of Lehman Bros, the first two books to be sold were books on spirituality. Another huge growth area is teenage fiction thanks to the Harry Potter effect on our growing kids, with help from teenage vampires in Twilight and teenage fathers in Nick Hornby's Slam. The common wisdom is that this mortgage-free demographic market's disposible income remains relatively unaffected, although books compete for it with games and music. People will also still buy books for their kids. The success of Ascent of Money, Black Swan and The Great Crash 1929 shows that those books helping us understand what's happening are also flying out the door.
So what are we worried about?
In short, it might not be our readers, but our retailers.
The once mighty high street has been fighting competition from online and supermarkets for a few years, but when every day another high street name goes into administration, we have to assess the risk. When a company goes into administration, the independent administrators sell off as many assets as possible, paying off debts in order of priority. If we have lots of stock sitting in a customer's warehouse or on their shelves, we first have to prove to the administrators that we supplied it, rather than a third party wholesaler, and then once that value is assessed, we may only be awarded pence in the pound. So a retailer going under is bad news for its suppliers.
There is a theory that in these times it's best to be very big so you can take a hit like the one I've described, or to be very small, so you can turn on a dime in response to tricky market conditions. Each of our retailers needs a strategy to suit these times as much as we do: whether it's negotiating down rents and utilities, increasing margin on every book sold, increasing marketing income, consolidating roles, departments or even outlets, making cost savings in the supply chain, and so on. That can make for even tougher negotiations between publishers and retailers, but it's not the only game in town. How do we get back to creativity and innovation? How do we as publishers and retailers inspire our customers to buy books?
Peter Brook felt passionately that a theatre of more limited means helped to bring theatre-makers and their audiences into a closer rapport. The stage is bare. Enter an actor and a book.
Fiona Buckland
Sales Manager
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