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David Kent, domestic publishing, and the problem of distribution: why yesterday’s HarperCollins news matters

There are plenty of reasons to be concerned about yesterday’s news that HarperCollins Canada is embarking on a restructuring that will see the elimination of more than 100 jobs. The most high-profile of those job losses is obviously president and CEO David Kent, who has been with the company for 13 years. During his tenure, Kent was a passionate, devoted, and vocal advocate for the authors HarperCollins Canada published, including such CanLit stalwarts as David Bergen, Helen Humphreys, Frances Itani, David Bezmozgis, D.R. Macdonald, Richard B. Wright, Emma Donoghue, Charlotte Gray, Barbara Gowdy, and Lawrence Hill.

Kent was something of an anomaly for a CEO of a multinational publisher: outspoken and verging on defiantly nationalistic (notwithstanding the fact that he is American by birth), he repeatedly stood up for Canadian writers in the press and at various industry events, always willing to go to the mat for what he believed in. Though he is staying on in his current position until the end of the year, his impending loss is already being felt in ripples throughout the industry.

Equally concerning is the fact that not only is Kent being let go, but the position of Canadian CEO is being eliminated altogether. Quoted in Q&Q yesterday, Brian Murray, president and CEO of HarperCollins U.S., said, “The role of CEO of HarperCollins Canada is no longer there because we’re consolidating a lot of activities across the U.S. and Canada, so it’s more of a North American operation. We think that’s a more efficient way to serve booksellers and serve our authors.”

Certainly, some in Canada would debate this avowed efficiency.

At least as important as Kent’s departure, though not so headline-grabbing, is the news that HarperCollins Canada will be closing its domestic warehouse and moving fulfillment to Indiana-based RR Donnelley. Distribution is not a flashy subject, but its importance to the publishing ecosystem is difficult to overstate, and following the 2011 bankruptcy of H.B. Fenn and Company, at the time the largest Canadian distributor, the disappearance of HarperCollins’s domestic warehouse is sure to have an effect on the industry as a whole.

HarperCollins handles distribution for House of Anansi Press, Greystone Books, Douglas & McIntyre, and ChiZine Publications, among others. The loss of a domestic warehouse for these titles must surely have an impact on the ability of the publishers to move stock around the country expeditiously and, to co-opt a word already used, efficiently.

Quoted in The Globe and Mail, Rob Sanders, Greystone’s publisher, refers to distribution as “a very mechanical part of the business,” but acknowledges that “not everybody does it well.” Howard White, co-owner of D&M, also tells the Globe that at HarperCollins, “everybody knows everybody in the business. You can talk to them and say, ‘We need something quick for a book signing,’ and they’ll bend over backwards to get it out there for you. I can’t imagine calling up Indiana … and talking to a global distributor who considers Canada one of its smaller clients and getting anything like that kind of service.”

Canada does not have a mass market comparable to that of the U.S., and at one-tenth the population, we cannot be considered more than a blip on the radar of our more populous neighbour. This is precisely why a vibrant domestic distribution sector is so important to Canadian publishers. Although Murray makes assurances that the editorial program at HarperCollins will remain intact – and it must be admitted that the editorial team in place there, including Iris Tupholme, Jennifer Lambert, Jane Warren, and Jim Gifford, is staggeringly strong – if books can’t move freely and quickly into the hands of booksellers, media, and other stakeholders, it really doesn’t matter how good or bad they are.

In many ways, distribution is like bookselling: relationships matter, and the more localized the process, the better attuned the workers are to the market they service. This is not so important for a major multinational, or a publisher like Harlequin, which HarperCollins’s parent company, News Corp, acquired earlier this year. Harlequin is large enough, and well-established enough throughout the North American market, to be able to survive in the current environment. (Since its acquisition by News Corp, Harlequin’s books have been warehoused in Buffalo, New York.)

But the same is not true for a small independent like ChiZine, or a regional publisher like Greystone or D&M, both of which rely on local markets for much of their revenue. This is to say nothing of the ancillary costs – tariffs, transportation, etc. – associated with having Canadian books warehoused in the U.S.

Despite the inroads made by digital publishing in the past years, physical books continue to account for the largest chunk of publishers’ sales; but in order for books to be sold, there needs to be a mechanism in place to get them into the hands of readers. Amazon has put a dent in the traditional business model by proving that many buyers are willing to shop online; HarperCollins U.S. has itself responded by revamping its website to sell direct to customers. For these reasons, “consolidation” involving the dissolution of the company’s Canadian warehouse likely makes a certain amount of business sense for the company, particularly if rumours of an impending merger with Simon & Schuster prove correct.

However, the loss of yet another Canadian distribution centre cannot be good news for the continued vibrancy of a diverse and stubbornly regional domestic publishing environment.

Update: A quote in the Globe article from Howard White was mistakenly attributed to Rob Sanders. This post has been revised to reflect the correct attribution. Q&Q regrets the error.