Random House (RH) reported that both sales and earnings were down last year. RH parent Bertelsmann attributed the decline mostly to the weak dollar and the slowing US economy. Worldwide RH revenue fell 5.6%, to €1.84 billion ($2.39 billion), and earnings before interest and taxes (EBIT) declined 4.9%, to €173 million ($225 million). The drops weren’t solely due to currency fluctuations, as RH head Peter Olson said in his letter to employees that the company “felt the absence of newly published megaseller hardcovers, which in today’s trade publishing business can mean the difference between a good fiscal year and a great one.”
Looking toward the future, Olson wrote that he believes, despite all the current difficulties, that RH can achieve its “ambitious” corporate fiscal targets. He noted the company recent unexpected bestsellers, and expressed hope for future titles including Christopher Paolini’s Brisingr, the third volume in his Inheritance series.
Results for Bertelsmann’s Direct Group showed significant declines from the previous year, and Bertelsmann chairman Hartmut Ostrowski said the company is “examining all strategic options, including the possible sale” of the group, which includes Bertelsmann Direct North America, home to the former Bookspan book club operation (including the Science Fiction Book Club). For the year, the Direct Group took €123 million in integration and restructuring charges and write-downs of €291 million directly related to the North America club activities. Direct Group revenue fell 4.1%, to €2.55 billion, while EBIT plummeted more than 90%, to €10 million.