Not even Harry Potter’s publisher is immune from the effects of Covid-19. In London Bloomsbury has announced a range of measures designed to save money in the face of a worst case scenario which could see print revenues fall by as much as 75%.
The measures include issuing some four million new shares which, within hours of trading, had raised some £8.4m which will provide “additional headroom to provide financial flexibility to the company to enable it to maintain appropriate investment to capitalise on future commercial opportunities, whilst ensuring it remains within its banking covenants”.
The other measures include a recruitment freeze, a cut in the marketing spend and putting a number of staff on furlough, in common with most of the major publishers in the UK.
The publisher said: ‘Since the company’s pre-close trading update on 19 March 2020, the coronavirus crisis has rapidly escalated with the imposition of government lockdowns, restrictions and retail closures in all our key markets of the UK, US, Australia and India as well as many other important markets.
‘Retail closures have affected most UK and North America bookshop chains, including the retail branches of Waterstones, Barnes & Noble and WH Smith. Whilst some retailers have been able to continue to trade via their websites, orders for print books, which comprised 79 per cent of the Company’s revenue for the year ended 29 February 2020, are being impacted in all our markets.
‘There is no immediate certainty around the severity and duration of the impact on our business and therefore the Board is unable to provide guidance for the year ending 28 February 2021 at this time.
The impact may be substantial; the extent to which the coronavirus crisis will impact our business will depend on the changing positions of our major wholesale print and digital customers, academic institutions and the duration of government lockdowns and restrictions and in particular their impact on retailers and academic institutions.’
However, on a more positive note, it said that it was seeing strong demand for e-books and audiobooks, and that there had been a strong recovery of orders in China as that market eased its restrictions.
But the seriousness of the situation is underlined by the actions of this most successful of publishers – and the message is clear: there is a way to go yet before the industry emerges from the clutches of this deadly pandemic.