MAIN NEWS HEADLINES
October 15-31, 2004 Edition
Hachette Livre CEO Talks
About Hodder Acquisition,
Future Plans to Enter U.S.
An exclusive Authorlink interview
DALLAS, TX/PARIS, FRANCE/9/21/2004Recent news that Hachette LivreFrance and Spain’s largest publisherhas acquired Hodder Headline, the fourth largest publisher in the UK, has prompted speculation that Hachette’s parent Lagardere Media is in an ideal position to enter the United States publishing arena, most likely through an acquisition.
Authorlink talked with Hachette Livre CEO Arnaud Nourry in an exclusive interview about editorial and operational plans for the newly merged publisher, and how and when it might enter the American market, if at all.
AUTHORLINK: We understand that Hachette Livre has closed the deal to purchase Hodder Healdine for 210 million pounds. As a result of the sale, how does Hachette Livre now rank among European publishers?
ARNAUD NOURRY: Hachette Livre signed the agreement to purchase Hodder Headline in late July, subject to clearance by the British authorities and shareholders. Before the acquisition, Hachette Livre ranked No. 5 in the UK and Hodder ranked No. 4. The combined group will now rank No. 2 in the UK, No. 1 in France, and No. 2 in Spain. The sale now places us among the largest three publishers in Europe, behind Pearson Plc. [which owns Penguin Putnam] and Bertlesmann [which owns Random House].
AUTHORLINK: Do you already have a publishing presence in the United States?
NOURRY: We are among the largest publishers in Europe, but only in Europe. We have no direct presence in the United States at this time, though we do export titles through various distribution channels.
AUTHORLINK: Your parent company, Lagardere Media had first quarter 2004 growth of 3.4 percent. What kind of growth are you forecasting for the media group in the last half of 2004?
NOURRY: Hachette Livre division showed strong profits for the first half of the year, and we expect to have a solid the full year. Our educational publishing units in France and Spain will show a slight sales decline this year, which could lower a little bit our second half of the year performance versus first half.
AUTHORLINK: Your parent company, Lagardere, already has offices in New York, and its distribution company, Curtis Circulation, is the largest American press distributor. Does the distribution company handle mainly your magazine operations? Does Curtis also distribute books? Is it positioned to handle a significantly larger book fulfillment operation?
NOURRY: You would need to ask our Lagardere chairman for a precise answer. But I doubt our strategy would be to have Curtis become a book distributor at this stage. Magazine and book distribution are quite different operations with different customers.
AUTHORLINK: Are you already selling your titles in the U.S.?
NOURRY: We do sell many of our titles in the U.S. through retailers such as Barnes & Noble, and through wholesalers, including Ingram and Baker & Taylor, and also through distribution agreements with other publishers. For instance, we have a long lasting and excellent relation with Sterling. However, we do not directly publish titles in America. The U.S. is a huge market. We would have to establish significant operations to actually publish there. About 15 percent of our UK sales occur in the U.S. as direct exports or co-editions with other publishers. We also sell rights to publishers who want British authors. We have a significant business in illustrated children’s books through U.S.-based publisher Octopus.
AUTHORLINK: How has the decline of the U.S. dollar against the pound helped Hachette Livre?
NOURRY: In France there has been no significant impact from the decline of the dollar. We don’t buy in dollars. However, the exchange rate may have had a small impact on the price we pay for paper. UK publishers exporting to the United States obviously have been helped by the weaker dollar.
AUTHORLINK: In your press release about the Hodder acquisition, Hachette Livre says the purchase “marks a decisive step for expansion in the English language market (a key factor in your future growth). What plans do you have to enter the U.S. market as a book publisher?
NOURRY: The Hodder acquisition is perhaps a first step toward entering the U.S. market. But in a single year we have acquired several new units, including parts of our French competitor Editis, and have increased our sales on a pro forma basis by 70 percent. Our organization will need time to fine tune. For the next two to three years we will concentrate on making all the Group work together smoothly and efficiently.
The second step involves growing our English language market. As we want to expand internationally and particularly into Eastern countries, it becomes more important to have catalogues in English. This has underpinned our strategy to expand in Britain. Countries such as China and Poland aren’t much interested in books written in French. The British on the other hand, export many English-language titles to these countries.
AUTHORLINK: When the time comes for you to enter the U.S. would you team with any other American publisher or come into the market on your own?
NOURRY: We are not specialists in the U.S. market, though we were involved with Grolier in the 1990s. Given the size of America and of its publishing market, we would not do things on our own. If we were to enter the U.S. market it would be through an agreement with or acquisition of a U.S.-based company. This is speculation, however. As I said, we have other priorities at this time. We are not even entirely sure we need to be in the U.S. We have thrived this long without a presence there.
AUTHORLINK: How will the new Hachette Livre-Hodder Headline entity break down its publishing volume in terms of geographical location?
NOURRY: On a pro forma basis, with Hodder and the divisions of Editis, we will release 50 percent of the titles in France, a third in the U.K., and the balance in Spain, South America, and other various countries.
AUTHORLINK: What kinds of books does Hachette Livre currently publish in France?
NOURRY: The heart of Hachette is still in education. Our two educational divisions in France produce about one-third of our total sales. Other revenues come from illustrated books for children, travel guides, coffee table books, fiction, and nonfiction. In France, we offer a balance between educational books, illustrated titles, and literature. Hachette publishes a variety of French titles ranging from the Da Vinci Code [a half-million copies sold in French], to literary books, and a joint venture with Harlequin.
AUTHORLINK: what lines or imprints will be shut down as a result of the acquisition?
NOURRY: Our culture is to have our imprints autonomous. We are organized as a federation of small teams. We don’t intend to shut down or merge any imprints.
ABOUT ARNAUD NOURRY:
The 43-years-old CEO has been with Hachette Livre for 14 years. Since 2000 he has been in charge of the company’s educational units in France, and was recently named CEO of Hachette Livre.