Beano and Commando publisher DC Thomson has confirmed its Bath-based company Parragon Books, publisher of the top-selling Beano annual and many popular titles under license, will enter into consultation about the potential closure of the business this week.
The company is said to still be exploring whether a sale of all or part of Parragon is possible.
The potential closure puts 245 jobs at risk of redundancy globally, 140 in the UK, but no other part of family-owned DC Thomson – which also owns the free magazines Stylist and Shortlist, as well as Scotland’s Sunday Post, made a pre-tax profit of £38.1m last year.
From children’s books to lifestyle products, toys and gifts, award-winning Parragon, launched in 1988, publishes a wide range of children’s titles, working with global brands such as Disney, DC Comics, Marvel and Nickelodeon. Publishing in over 25 different languages, in over 35 global markets, the company also has offices in New York, Cologne, Delhi, India, Melbourne, Hong Kong and Singapore.
Along with its wide range of children’s books, Parragon has published numerous Christmas annuals, some under licence including, last year, the Beano annual and other DC Thomson comics-inspired titles, Justice League, Paw Patrol, Bob the Builder and more.
(Work on the Beano and Dandy annuals for this year was already well progressed, so at this stage here at downthetubes we think it highly unlikely such popular titles will not be published, despite the deep discounting of such titles by supermarkets on release that must surely impact their profitability).
Parragon sold £8.7m in the UK last year through Nielsen BookScan, down 12.2 per cent on 2016 (£9.6m) and 15.6 per cent down on 2015 (£10.2m).
The news comes shortly after Parragon had been named the master publishing licensee for MGA Entertainment’s L.O.L. Surprise brand, one of the top toy hits of 2017, a toy line inspired by the YouTube unboxing phenomenon.
DC Thomson has told The Bookseller Parragon is closing down in the UK because of competition and a lack of retail space. The company said it decided to exit the books market, where Parragon specialises in licensed titles, because the channels Parragon publishes into are “hugely” competitive and retail space is increasingly challenged. These problems are a factor in its businesses worldwide.
A statement from DC Thomson said that the Bath-based company has been challenged, underperforming for a number of years due to difficult market conditions and severe pressure on margins.
In the UK, the business will enter a 45 day collective consultation process with employees on 7th March. In other territories, the company will follow the respective processes.
In the US, DC Thomson will continue to liaise with employees, but in Australia, selective assets of Parragon Publishing have already been transferred to Lake Press. This transaction will be completed within 21 days.
Mike Symons, CEO, said: “Early least year, the new management team joined and undertook a strategic review of the company, implementing some immediate changes which improved the company position.
“Under their guidance, the whole team made really significant progress over and above the expectations of the shareholders, but the market has gone against us further than anticipated, so today we are announcing that it is the strategic decision of DC Thomson to exit from Parragon operations worldwide.”
David Thomson, director of DC Thomson, added: “While we are still open to offers and expressions of interest for the business, DC Thomson is unable to run this process indefinitely.
“Therefore, the company has made the decision to enter into a consultation process. This decision has not been entered into lightly and, as owners of the business for more than a decade, we are very disappointed to be making this announcement today.
“No other parts of the DC Thomson group are affected by this and DC Thomson is fully committed to supporting Parragon throughout this process.
“We would like to thank everyone involved in the Parragon business for their continued hard work and support. We will work with all individuals to support the best possible outcome during this period, providing employees with details of opportunities elsewhere across the group where possible.”
Despite this sad news for Parragon, other parts of the DC Thomson empire are thriving. The Daily Telegraph reported in December that the company’s profits last year were boosted, for example, by a 26.5 per cent growth in its gifts business Wild and Wolf and a 13 per cent rise in sales via its British Newspaper Archive site.
If Parragon Books is sold as a going concern, it wouldn’t be the first time DC Thomson has successfully divested itself of a publishing company. Waverley Books, who published The History Of The Beano and The Art And History Of The Dandy (as well as the two Alan Grant/Cam Kennedy graphic novels Kidnapped and Jekyll And Hyde), are, for example, no longer part of DC Thomson, after being bought by the Gresham Publishing Company Limited in 2013, along with Geddes and Grosset.
• Parragon Books is online at www.parragon.co.uk
• Parragon Books Announces Potential Closure (27th February 2018 Press Statement by DC Thomson)