Interesting spin in the following article. But I don't see how they
can keep all the outlets open, especially where there's a Deseret and
Seagull right across the street from each other. Reading between the
lines, it sounds like Seagull will become the outlet mall for Deseret,
perhaps with premium new releases at Deseret and discounted titles at
Seagull.
Deseret Book buys 2 top competitors
Covenant, Seagull bought without layoffs or closures
By Jenifer K. Nii
Deseret Morning News
Deseret Book has acquired former competitors Covenant
Communications and its sister company, Seagull Book & Tape.
Financial details of the transaction were not released. But the
deal announced Thursday brings the curtain down on what had been a
tumultuous year for the companies, which had been tangled in disputes
about merchandising and marketing.
The deal was initiated by Seagull and Covenant founder Lewis
Kofford and finalized Thursday.
"I've been looking for an exit strategy for a number of years,"
Kofford told the Deseret Morning News. "This presented itself, so I'm
very happy with it."
Both Seagull and Deseret Book sell primarily religious books and
merchandise targeted at members of The Church of Jesus Christ of
Latter-day Saints. Covenant is a publishing house for such products.
As recently as July 2006, Deseret Book and Seagull Book & Tape
said they were in talks "to explore options for addressing the
differences that have existed between (the) two companies," which
according to Deseret Book executive vice president Jeff Simpson
included disagreements about how Seagull merchandised, marketed and
promoted Deseret Book products.
Earlier in the year, Deseret Book threatened to pull its
products from Seagull stores over those same issues.
Kofford said Thursday that what started with a meeting between
adversaries underwent a transition during the last six months.
"It started out as an adversarial situation, but as we started
talking, what came out of it on all sides was more of an
appreciation," Kofford said. "And as we got into more open
communication, the acquisition and the things it offers to the market
became something that made sense to all parties."
Going forward, the two companies will continue to operate
independently, and all existing relationships with authors attached to
both companies will remain intact, the companies agreed. There will be
no layoffs or store closures, and existing management teams will
remain in place.
"We are not going to merge retailers; we are not going to merge
publishers. We're going to let Seagull be Seagull, and we're going to
let Deseret Book be Deseret Book," said Sheri Dew, president and chief
executive officer of Deseret Book. "They've co-existed before, and all
found their markets and have been successful."
Dew called the acquisition "a significant step, an important
step and a surprising step," but ultimately one that made sense.
"What we've done is typical of both the publishing and retail
industries, both of which Deseret Book has been involved with for
years now," Dew said, pointing to examples like Nordstrom, which
operates Nordstrom and Nordstrom Rack, as well as the many divisions
and labels at publishing houses like Doubleday.
Looking at Seagull and Covenant, Dew said Deseret Book saw a way
to reach more customers and a wider market.
"We knew Covenant well, because they've been our competitors for
years," Dew said. "They're strong, and they've tended to be strong
where maybe we're not as strong. Each of us has our unique strengths,
and this (deal) allows us to expand our ability to reach a broader
array of customers, both as a publisher and a retailer."
For Seagull or Deseret Book customers concerned about what
effect the acquisition will have on the operations at the respective
companies, Dew and Kofford sent their assurances.
"Why would we buy them, only to change them and have them be
us?" Dew said. "For those who like Seagull, I'm happy to reassure them
that Seagull will be Seagull, and that's just how it is. We're certain
that there's a place in the market for both (Seagull and Deseret Book,
Covenant and Deseret Publishing), and that they'll both do very well."
"The plans and projections that they represented to me are to
keep the companies in place," Kofford said. "I also happen to be the
landlord here (at the company's flagship store on Redwood Road), and
they've signed long-term leases. So it looks to me that they're
serious and intent on keeping them separate.
"I don't see that there will be any change" in terms of
operations or product quality, he said. "I've built a really strong
management team in each of the companies, and they're staying in place
in the same facility. It will be business as usual."
As for Kofford? He'll be concentrating on other things.
"I'm going to work hard at being a full-time grandfather," he
said. "I have 25 grandchildren."
Deseret Book, like the Deseret Morning News, is a wholly owned
subsidiary of Deseret Management Corp., the holding company for
businesses owned by the LDS Church.
--
Check out some edgy-but-not-apostate Mormon entertainment at
https://ZarahemlaBooks.com. Check out my personal blog at
http://ckbigelow.blogspot.com.
