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More Armageddon or Christmas is coming?

13 October 2008

Since News Review last looked at the global financial crisis three weeks ago (A week of Armageddon 22 September) the situation has deteriorated markedly and seems poised on a knife-edge. The financial crisis has tipped over into the rest of the economy and the interbank credit crunch has created such a panic that global recession is staring us in the face.

So how is the book world faring now?

The UK autumn lists look strong and book sales are holding up, at the moment at least. The usual caveats about books doing well in recession have been applied, but the truth is that the possible effects of the turndown have still to make themselves felt. The latest Nielsen BookscanUK bibliographic organisation, describing itself as 'the definitive retail monitoring service for books', which shows UK bestseller lists on its website. figures show that overall sales are currently up marginally on a year ago, but it could be another story if there is a sharp retail turndown.

Tim Hely-Hutchinson, CEO of Hachette UK, the UK's biggest publisher, says: 'Sales are remarkably buoyant given the current economic doom and gloom... Traditionally in times of tough economic conditions, books are perceived as very good value. To date, we have had a very good year across the board. Next year, of course, things may get tougher.'

UK publishers are anxious about big wholesaler Bertrams, which has been affected by questions about the financial health of parent company Woolworths. Bankruptcies are what businesses fear in a recession, exposing any company which is not financially secure, but there's also the question of the companies' share prices.

In general the picture looks worse in the US, although it's notable that debt-free bookselling chain Barnes & Noble has been in a strong position. Random House worldwide reported that its results for the first half of the year were 8% down on the same period last year, although the UK part of the company is doing well.

Borders' share price is down 44% since September 11. Books-a-Million has fallen even further, losing 49% since September 11, shedding 25% in the past 6 days.

Amongst international publishers Hachette parent Lagardere's share price is down 31.5% since 12 September and News International, parent company of HarperCollins, is down 36% since the same date. Bloomsbury bucks the trend and its shares have gone down just 3.5% in the last month.

In the bookshops books are still selling and nobody knows whether the global crisis will be resolved, or will lead to a major recession. In the meantime Christmas is coming up, the gift-buying frenzy which deliver the most important few weeks of the whole bookselling year in those countries which celebrate it. The UK has already had 'Super Thursday', 2 October, when no less than 800 new titles were released to great excitement. And this week publishers are winging their way to the Frankfurt Book FairWorld's largest trade fair for books; held annually mid-October at Frankfurt Trade Fair, Germany; First three days exclusively for trade visitors; general public can attend last two., the biggest annual jamboree of the international book trade, to buy and sell their wares. So life goes on as usual, we hope.