Raincoast Books, the Vancouver, British Columbia company that brought the blockbuster Harry Potter series to Canadian readers, announced Monday its imminent departure from the publishing business.
The Vancouver-based company is halting its publishing program and announced other cost-cutting measures, putting the blame on the strong Canadian dollar and the resulting detrimental effect on the book retail industry. The 15 books set for release this spring will be the final slate from Raincoast, which largely counted West Coast and children’s book authors in its publishing stable.
Raincoast officials said the company plans to refocus on its core business of distribution and wholesaling, but the streamlining measures will mean the closing of its warehouse in Mississauga, Ont., axing about 20 jobs in Vancouver and Toronto and reducing the number of its distribution clients.
Nevertheless, the company will continue to offer the Harry Potter books — part of its ultra-successful venture with U.K. publisher Bloomsbury — to Canadians, they added.
Amid the rapid rise of the Canadian dollar last fall, anger grew among the book-buying public over the fact that prices in Canada remained significantly higher than those of U.S. retailers.
Raincoast, “just like every other publisher in Canada and distributor here, was faced with an unprecedented situation last year, namely the appreciation of the Canadian dollar [relative to the U.S. greenback],” marketing vice-president Jamie Broadhurst said. “There has been a fundamental sea change in the Canadian book industry. Canadians have spoken loud and clearly in terms of what they feel is a fair price for books, and publishers and distributors are going to have to adapt to that new reality.”
For Raincoast, “85 per cent of our business is import books from the United States. So as a result, an appreciation in the dollar’s value affects us very close to our heart.” Raincoast reduced its suggested retail prices by 20 per cent as a result of the rise in the Canadian dollar, he said.
Carolyn Wood, executive director of the Association of Canadian Book Publishers, described Raincoast’s move as “very sad news.” The company “has published some outstanding books over the years. When a publishing program as important and well supported as that one can’t be sustained, it tells you something about the precarious world in which Canadian publishers operate.”
“We’re definitely in a deflationary spiral,” said Brad Martin , president and chief executive officer of the country’s largest trade publisher, Random House Canada.
Martin predicted the trend of declining prices for both U.S. titles sold in Canada and Canadian-written books will accelerate in the next 12 months. And while this may be good news for consumers – provided, that is, a much-predicted recession doesn’t sharply diminish their purchasing power – it means “a difficult year” in terms of revenues for publishers, distributors and booksellers, especially among smaller, independent operators.
He acknowledged that the Random Canada conglomerate, a wholly owned foreign subsidiary with imprints such as Knopf, Doubleday and Vintage, “is better able to withstand the coming storm” than, for example, a Canadian-owned independent like Toronto-based House of Anansi, which has to make most of its money from Canadian titles.
However, prices, particularly prices of Canadian titles, can only come down so far here, especially given the limited economies of scale available in a country of 33 million. “If Canadian books had to be priced according to real costs in a totally sort of Adam Smith world, with no government support, they’d be way higher than they are already.”
Remarked Carolyn Quinn, executive director of the Association of Canadian Publishers: “You can’t get blood out of a stone. Profit margins in this country are “very small … and a book costs what it costs,” even with subsidies from the federal government’s Book Publishing Industry Development Program, among other publicly funded support networks.