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80 years of Q&Q: CanLit gets down to business

Distribution debacles

When people think of Canadian publishing, the images that come to mind are likely those of iconic writers – Atwood, Munro, Mowat, Richler – or swanky Giller-style parties. They don’t think of distribution: a decidedly unsexy topic, without which the rest of the industry wouldn’t exist.

“[Distribution] is the nuts and bolts of publishing,” Sarah MacLachlan, president and publisher of House of Anansi Press, said in The Globe and Mail in 2014. Solid distributors – such as Raincoast, UTP Distribution, and the Literary Press Group – remain invaluable, even in the era of ebooks and self-publishing.

If you’re in doubt, consider the seismic shockwaves the industry underwent with three key shakeups in the Canadian distribution landscape over the past decade and a half.

2002: General Distribution Services collapses. Jack Stoddart’s empire  went bankrupt as a result of the implosion of GDS, a victim, at least in part, of the massive returns from Larry Stevenson’s Chapters megastores at the beginning of the 21st century. (The GDS demise was exacerbated by the purchase, several years earlier, of a gigantic, 300,000-square-foot warehouse in suburban Toronto.) According to Roy MacSkimming’s book The Perilous Trade, GDS “handled order fulfillment for some 200 other publishers, sixty-two of them Canadian.”

2011: H.B. Fenn declares bankruptcy. One of the publishers caught up in the GDS boondoggle got hit again when H.B. Fenn and Company went under. Key Porter Books, one of GDS’s major creditors, was purchased by Fenn in 2004. When Fenn closed the Key Porter office and laid off key staff in September of 2010, the writing should have been on the wall, especially given the loss of Hachette Book Group, its largest sales and distribution client, two years previous. Still, the announcement of Fenn’s entry into bankruptcy, in February 2011, took many by surprise. A press release at the time said Fenn “encountered significant financial challenges due to the loss of distribution lines, shrinking margins, and the significant shift to ebooks.”

2014: HarperCollins closes its Canadian warehouse. Hachette abandoned H.B. Fenn when it moved to open its own fulfillment centre in Canada, which highlights the danger to the domestic ecosystem when a large multinational decides to circle the wagons. The same effect was felt toward the end of 2014, when Harper-Collins announced it was closing its Canadian warehouse. “We’re consolidating a lot of activities across the U.S. and Canada,” HarperCollins U.S. CEO Brian Murray told Q&Q at the time. “We think that’s a more efficient way to serve booksellers and serve our authors.” Efficient for the multinational, perhaps, but nonetheless disruptive and concerning for domestic players. – Steven W. Beattie

These stories appeared in Q&Q’s 80th anniversary feature in the April 2015 print issue.