January 08, 2008
Press Release (Vancouver January 7, 2008)
Raincoast Books announced today a comprehensive plan to focus on its core business operations.
In the wake of 2007's appreciation of the Canadian dollar, Raincoast reduced suggested retail prices by 20%. Now Raincoast is moving to control costs. Starting today, the company will be streamlining business operations and focusing exclusively on its long-term distribution partners and wholesale business. This marks a return to Raincoast's original, and very successful, business model.
The major elements of the 2008 business plan include:
The closing of the Raincoast publishing program: Spring 2008 will be the final season for the Raincoast publishing program. Although it has won or been short-listed for every major literary prize in Canada during the last decade, the publishing division has remained unprofitable. The spring's 15 titles will be supported with full sales and marketing campaigns. Raincoast will honour all outstanding financial contractual commitments to its authors. “This has been a necessary but very painful cost-cutting decision,” said Allan MacDougall, CEO of Raincoast Books; “made all the more difficult by the exceptional calibre of writers and the staff we have cultivated over the last few years.”
Consolidating warehouse space: Currently 95% of Raincoast's shipping is through the Vancouver warehouse and the company has decided to close its smaller secondary warehouse in Mississauga. The target completion date for this is March 31. Raincoast is confident that it will maintain its industry-leading shipping times to customers across Canada.
Staff reductions: The above closures, combined with some streamlining of workflows, will result in a loss of 20 staff positions through layoffs and attrition. Raincoast and its Toronto-based division, Publishers Group Canada, will continue to operate fully staffed sales and marketing offices in both Vancouver and Toronto. BookExpress will continue to provide wholesale service to customers across Canada.
Focus on core distribution partners: Raincoast plans to make strategic cuts to its stable of distribution clients in order to devote more resources to key publishers. This will be implemented in the second half of 2008 and trade announcements will follow shortly. This strategy will allow Raincoast to devote more resources to its long-term core distribution partners and to seek out new lines that fit its business model.
“Raincoast can only deliver on the promise of lower suggested retail pricing by having rigorous cost controls and an absolute focus on our core business,” said Allan MacDougall. “These are the new realities of the Canadian book industry, and we are prepared to face these challenges head on in 2008.”
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