Publishers Lunch said:
While Torstar's newspaper business suffers heavily from the advertising slump, sales at the company's Torstar unit have remained strong, boosted further by the weak Canadian dollar.The press release said:
"Harlequin delivered an excellent quarter of growth while our newspaper businesses confronted lower advertising revenues as a result of the recession," said Robert Prichard, President and CEO of Torstar Corporation. "Harlequin has made a strong start and is on course for another solid year. Despite the global recession, Harlequin's overall performance remains strong with digital revenue growth offsetting some print declines in Japan and the U.K."
Harlequin's revenue from book publishing was $124.5 million [CAN] in the first quarter, which was up $14.8 million from the same period in 2008.
In looking more closely at that revenue increase, only $3.3 was an actual increase in sales while $11.5 million came from foreign exchange rates (the Canadian dollar is weaker than it was). The revenue from the three divisions of the company broke down this way:
- North America Retail -- up $2.2 million
- North America Direct-To-Consumer -- down $1.4 million
- Overseas -- up $2.5 million
When it came to profits, Harlequin was up $2.2 million for the first quarter, excluding the foreign exchange rate impact.
- North America Retail -- down $0.3 million
- North America Direct-To-Consumer -- flat
- Overseas -- up $2.5 million.
Harlequin continues to move away from its staid past as it repositions itself in the digital world. About thirteen months ago, the company announced it would distribute digital manga on Japanese cell phone and Internet sites through the SoftBank Group, a provider of cell phone service in Japan. While Harlequin continues to publish p-book copies of manga in Japan, this move was intended to capture the large audience of Japanese who read on their cell phones during commutes.
At the beginning of this year, the Anime News Network reported that Harlequin was launching "Monthly Harlequin, a new Japanese magazine of one-shot manga stories 'in the style of overseas romance novels'." The first edition had four standalone stories.
When I went to the "Interim Management Discussion and Analysis," Torstar had this to say about Harlequin:
Overseas revenues and operating profit were both up $2.5 million in the first quarter of 2009. The agreement in Japan with SoftBank Creative Corp . . . to distribute digital manga (comic) content on cell phones and Internet distribution sites . . . was the primary contributor of improved results in the quarter. An offset to the success of digital publishing in Japan was a decrease in sales of printed books, primarily series titles.Publishers Weekly summed up the company's prospects:
While several countries reported modest year over year gains, the U.K. operation experienced a continuing decline in their direct mail business and lower retail series sales. At the end of the quarter, the U.K. operation announced the closure of their direct-to-consumer warehouse and the intent to outsource the fulfillment for that business.
Looking at the rest of 2009, Torstar said it expects Harlequin to have growth for the full year, but not at the rate posted in the first quarter. The publisher has largely avoided any negative impact from the worldwide recession, and results for the year should also gain from a weaker Canadian dollar.