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H.B. Fenn and Company declares bankruptcy

Mark Medley | 11/02/03 | Last Updated: 11/02/03 6:01 PM ET
More from Mark Medley | @itsmarkmedley

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    [Updated: 5:05 p.m.]

    Lisa Winstanley, like many of her co-workers at H.B. Fenn and Company, didn’t venture into the office on Wednesday on account of the snow. It was made clear, however, that all employees should show up to work on Thursday. Driving into work the next morning, Winstanley, a publicist with H.B. Fenn, says she had a feeling something was amiss.

    On Thursday, H.B. Fenn and Company, Canada’s largest book distributor, filed notice that they were initiating bankruptcy proceedings, marking the largest collapse of a Canadian publishing company since General Distribution Services/Stoddart Publishing went under in August 2002.

    According to a brief statement released on Thursday afternoon, the company has “filed Notice of Intention to Make a Proposal pursuant to the provisions of the Bankruptcy and Insolvency Act.” In layman’s terms? “We’re ceasing operations effective immediately,” Winstanley told the Post.

    “We have worked extremely hard to build the Company and keep it going even under today’s adverse conditions,” said Harold Fenn, the company’s founder and CEO, in the statement. “My heart goes out to our over 125 employees and to the many publishers we represent, as well as the customers that have supported us over the years.”

    Attempts to reach Harold Fenn were unsuccessful.

    Fenn founded the company that bears his name in 1977, and in subsequent years built the company into Canada’s largest distributor. In 2004, they became the controlling shareholder of Key Porter Books, with Harold’s son, Jordan, taking on the role of vice-president and publisher. According to their website H.B. Fenn distributes more than 50,000 titles, and represent publishers including American giant Macmillan, sci-fi stalwart Tor Books, Oxford University Press, St. Martin’s Press, and Vancouver’s Whitecap Books.

    “We had no idea,” Michael Burch, the founder, president and CEO of Whitecap Books, told the Post. He said that Harold Fenn personally called him Thursday morning to deliver the news, and that he was scrambling to secure inventory from the company’s Bolton, Ontario storage facility. “We are in a very precarious position, suffice to say. The next step, as we’ve only heard this news three or four hours ago, is to gather our thoughts and see what steps we can take to get our inventory, and following that find a home for it and continue with business.”

    While news of H.B. Fenn’s collapse stunned those the Post spoke to in the Canadian publishing industry — “We had no idea Fenn itself was in this much trouble,” said agent Anne McDermid — there had been worrying signs. Last September, the company shuttered Key Porter’s downtown Toronto offices and laid off the majority of its staff; Key Porter Books subsequently suspended operations in January.

    In the statement, H.B. Fenn blamed “the loss of distribution lines, shrinking margins and the significant shift to e-books” for their financial difficulties. The company lost a major source of revenue last year, after Hachette Book Group moved control of Canadian sales and distribution of its titles to their U.S. offices. “I think this situation was enormously affected by the departure of one very large client,” said Carolyn Wood, executive director of the Association of Canadian Publishers.

    “I feel terrible about this, knowing Harold and knowing how hard he’s worked to build up that business,” said Kim McArthur, publisher of McArthur and Co. “I am very surprised the government didn’t lift a finger to help when Key Porter ceased its publishing operations, as a result of Hachette removing half of its revenues. And now not just Key Porter, but H.B. Fenn has closed entirely. This is a very sad day indeed for the Canadian publishing industry.”

    In an interview with the Post, Winstanley, who’d been with the company for three years, said that “when the whole Key Porter thing happened, that wasn’t a good sign for us. But I don’t think anybody thought it would be this sudden and on such a grand scale.”

    Edmonton novelist Wayne Arthurson’s second novel, Fall From Grace, which is published by Forge, was supposed to hit bookstores across the country on March 29. Now he’s not so sure.

    “I’m not sure what’s happening with the book,” he said. “My Canadian publicist got in touch with me and she pretty much said ‘It’s been nice working with you.’”

    Carolyn Wood, Executive Director of the Association of Canadian Publishers, said she’d spent the day talking to publishers affected by the news.

    “They know the reality before them,” she said. “They need to, first of all, find a way to get their inventory back; they need to find alternative distribution; and they need to seek the revenue that’s owed to them.”

    In all three cases, she added, that’s easier said then done.

    “The Fenn name, and certainly Key Porter’s name, are iconic names in the Canadian publishing landscape,” said Doug Pepper, president and publisher of McClelland & Stewart. “To see one or both of them no longer in existence, I think, is just not a good thing for the publishing industry and readers in general.”

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    Topics: Afterword, Canada, Key Porter Books, Toronto

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