Publishers Group West and the End of Independent Publishing as We Know It

Berkeley, California-based Publishers Group West was a book sales and distribution company that represented over 100 independent publishers. While it serviced some larger publisher imprints of Random House and Simon & Schuster, PGW was the marketing and distribution salvation for small quality presses like McSweeney’s, Soft Skull Press, and my own publisher Foxrock Books.

On December 29, 2006, PGW’s parent company declared bankruptcy, freezing many independent publishers’ end-of-the-year sales revenues and sending them into a state of financial crisis. McSweeney’s was the highest profile of these publishers. Advanced Marketing, PGW’s parent company, wound up owing them $600,000 worth of sales revenue.

How did this happen? And is this the beginning of the end for all traditional independent publishing?

At its beginning in 1976, Publishers Group West was an idealistic small publishers marketing collective started by Charlie Winton, a young Stanford University graduate. Back then, the group not only warehoused and shipped small press books, they actually promoted many of these books, creating surprise bestsellers like National Book Award winner “Cold Mountain” by Charles Frazier.

In 2002, after almost 30 years in business, Winton decided that he wanted to leave the distribution business and become a full-time independent publisher. He then sold PGW to a large company called Advanced Marketing Services, known for stocking book shelves, tables and magazine racks in Costcos and Sam’s Clubs throughout the country. This was not a very comfortable fit for publishers like Foxrock Books with literary titles by Marguerite Duras and Nobel Prize winner Samuel Beckett.

In 2003, the SEC began investigating PGW parent company Advanced Marketing’s accounting practices. This wound up with three of their top executives pleading guilty to falsifying promotional mailing circulation figures to their publishers. Unable to dig their way out of this debacle, Advanced Marketing declared Chapter 11 bankruptcy in late 2006. This was the biggest bankruptcy in publishing history. Strangely enough, 2006 was PGW’s best sales year.

In early 2007, Perseus Books Group, a mid-sized New York publisher entering the book distribution arena, offered some of PGW’s former publisher members a 70-cents-on-the-dollar settlement for owed revenues. This proposal was created with the full support of Charlie Winton, PGW’s former owner.

In February, 2007, Perseus began representing many of PGW’s former publishers, including Soft Skull Press. Other PGW indie publishers, however, were unable to make deals with Perseus and fell by the wayside; those included prestigious publishers like Thunder’s Mouth and Carroll & Graf.

Soft Skull publisher Richard Nash stated it all succinctly, “The independents got f*cked by the Enron of publishing.”

When asked if he regretted selling PGW to Advanced Marketing, Charlie Winton said, “At some point that question becomes personal, but the business had gotten so big that it was necessary for PGW to go to a new place.

And that “new place” was Advanced Marketing.

SOURCES:

A financial thriller in the publishing world”, Alana DeBare, San Francisco Chronicle, URL: (http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/01/27/MNG9DNQ8TM1.DTL&hw;=PGW&sn;=001≻=1000)

“The struggle for independents”, Priya Jain, Salon, URL: (http://www.salon.com/books/feature/2007/06/21/independent_press/)