Revenue at Penguin Random House rose 1.9% in 2018 over 2017 and earnings increased 1.3%, PRH parent company Bertelsmann reported this morning. Total revenue was €3.42 billion ($3.87 billion at current exchange rates) up from €3.36 billion in 2017, while EBITDA (earnings before interest, taxes, depreciation, and amortization) and rose to €528 million from €521 million. Bertelsmann said growth was due to a “strong bestseller performance, acquisitions, and growth in digital audio downloads” which offset the impact of negative exchange rates. Bertelsmann in particular pointed to the growth of digital audio, which “grew substantially in all the core markets,” and the sales performance of Michelle Obama’s Becoming (which sold 7 million copies around the world last year following its publication in November) as the biggest growth drivers in the year. In the U.S., the Dr. Seuss franchise also helped drive sales, with PRH selling more than 11 million copies of the children’s book classics. Click Read More below for additional detail.
Primarily smaller merchants doing business in Canada are scrambling to get product out the door and set up contingency plans as workers for Canada Post may be on strike as of July 2, according to various media reports.
On that date, Canada Post workers will be in a legal position to walk off the job, or be locked out by the government-run company, the Toronto Sun reported. Canada Post and the Canadian Union of Postal Workers have been locked in contract negotiations since January, but have failed to come to an agreement.
Jerry Hempstead, principal of Hempstead Consulting, said there is a different set of rules in Canada vs. the U.S. Postal Service when it comes to collective bargaining, “so it’s possible there will be a real work disruption.”
Hempstead added there is a robust set of alternatives to Canada Post because the vast majority of Canadian citizens live in a select set of metropolitan areas.
One main service option may be Purolator, although there is a question to whether workers for the Canada Post-owned carrier would have to honor a work stoppage. UPS and FedEx also have substantial networks in Canada, as does DHL through a contractor.
“Because the Canadian business is so concentrated in certain locals there are a myriad of messenger and courier firms that one can drop ship into,” Hempstead said. “So there are sufficient resources to keep shippers doing business there satisfied.”
The effect would mostly be felt by small-to-medium-sized ecommerce shippers, Hempstead said. “But there are lots of great options, especially regionally, to continue operations in Canada,” he added.
Tim Geiken, a principal in supply chain consultancy Platinum Circle Partners, agreed that Purolator remains a question mark. “They don’t have the capacity to pick up the slack, but if their operations are somehow affected or targeted it would be a bigger impact on U.S.-based shippers,” Geiken said.
He added that any postal hybrid operator using Canada Post, the country’s so-called “crown corporation,” for last-mile delivery is going to be directly affected as well by any work stoppage.