This article was originally published in Maclean's Magazine on July 22, 2002
Fenn, Harold (Profile)
It was Tom Thomson, oddly enough, who launched the tiny firm of H.B. Fenn and Co. Ltd. on the road to becoming a powerhouse in the Canadian book trade. In 1980, Harold Fenn, a former Coles Books executive, was three years into running his own business, trying to carve a niche between booksellers and publishers unable, or unwilling, to distribute their own titles. Given that his wares - Coles Notes and Canadiana products - were less than sexy, Fenn was restricted to what the trade delicately calls "alternative" markets, meaning just about anywhere other than an actual bookstore. One of his customers was the gift shop in the McMichael Canadian Art Collection, just north of Toronto. The gift store manager asked Fenn if he would be interested in distributing the gallery's own glossy publication, The Group of Seven and Tom Thomson. "She introduced me to Bob McMichael, who asked how many copies I'd buy," recalls Fenn, now 62 and the owner of a $100-million enterprise. "I gulped and said '10,000' - I'd never bought that many of anything in my life." Fenn got the contract and went on to sell 150,000 copies, a feat that opened doors for him with booksellers and publishers alike.
It's a neat, almost literary, irony that Fenn and Co. was kick-started by a Canadian title, given that its explosive growth since has been fuelled by American blockbusters. (The Bridges of Madison County and The Celestine Prophecy, to mention only two, together adorned the Maclean's best-seller list for more than 200 weeks in the '90s.) In 2002, celebrating its 25th anniversary, Fenn sits on top of the mountain - in terms of sales, the nation's largest Canadian-owned book distributor. "And not by default either," Harold Fenn is quick to add, noting that 2001 figures show he passed his chief rival, Jack Stoddart's General Distribution Services Ltd. ($88 to $87 million) months before GDS's April application for bankruptcy protection. This year, with 225 employees and 53,000 titles, Fenn expects to ship 17 million copies, and to see sales exceed $105 million - a number he wants to double over the next five years, even while he moves gingerly into the wonderland of Canadian literary fiction.
Fenn is clearly the sturdiest homegrown organism in what Roy MacSkimming calls the deeply stressed ecology of the national book trade. "Of course crisis is Canadian publishing's natural state," acknowledges MacSkimming, 58, a former publisher whose work on the subject, The Perilous Trade, will be published in February. But like many others, MacSkimming thinks things are really bad now. Large publishers, like the multinationals - HarperCollins, Penguin and the Random House group - which handle their own distribution and publish most established Canadian literary stars, are doing fine. But elsewhere in the trade, independent bookstores and small publishers - two crucial elements in launching the careers of new Canadian authors - have suffered from the effects of "gigantism," MacSkimming says, ever since the 1995 arrival of Chapters and its superstores. Now they also have to cope with, respectively, Amazon.ca, the Canadian spawn of Jeff Bezos's American on-line behemoth, and the collapse of the Stoddart empire.
A quarter of a million Canadians bypassed bookstores and shopped at Amazon.com last year, despite border hassles and currency transactions - a number that can only escalate now that Amazon.ca has removed those barriers. (Canadian retailers - and nationalists - who hoped for federal intervention against Bezos, took a body blow last week when the Department of Canadian Heritage ruled that Amazon.ca's on-line establishment was not covered by existing laws.) On the other side of the ledger, some 65 smaller Canadian presses are ensnared in the Stoddart court proceedings, their books locked up for months, their owners hanging on by grace of government grants and second mortgages. As for their authors, says distributor Bill Hushion, whose Hushion House has 900,000 volumes trapped in Stoddart's warehouse, "the people who have written novels or time-sensitive non-fiction might as well go out and shoot themselves. There's new shiny stuff, backed by serious marketing money, coming down the pipe."
The acrimony over these issues easily turns personal in a trade so intimate that everyone refers to the major players by their first names. That makes the Fenn founding myth worth a closer look. For all its right-place, right-time overlay, it's really about the importance of personal relationships - in that first case with the McMichael store manager. "I've thought all along," says Harold Fenn, "that this was a character-driven business, that building relations was it, that publishers would come to know I was a guy they could trust."
Fenn seized the Tom Thomson boost to his credibility with both hands. He and his wife Sylvia criss-crossed Canada, attending trade shows and meeting foreign publishers looking for trustworthy local partners. By 1981, he was handling books from Tor, North America's premier science-fiction imprint, home to such Canadian stars of the genre as Robert Sawyer and Phyllis Gotlieb. That rewarding relationship continued even after the prestigious U.S. house St. Martin's Press took over Tor; St. Martin's itself later signed on with Fenn. Other major foreign presses followed, including Warner Books and Macmillan UK, publisher of gothic thriller star Wilbur Smith. Some 80,000 copies of Smith's new novel Warlock are currently sitting in a Fenn warehouse, poised to bring the firm its next best-seller after its August release. "Harold has the cream of the cream of a bunch of foreign houses," says Hushion. "We're all jealous, but he's worked his ass off and he deserves it."
Displaying a prudence remarkable for the starry-eyed Canadian book trade, Fenn has a reputation for never taking on more than it can handle. (The firm has moved at least six times in 15 years from its original tiny facility in Mississauga to its current warehouses in unfashionable but low-tax Bolton, north of the city.) And Fenn has always, before now, avoided entanglement in the high-prestige, high-loss world of Canadian literature. To many, that makes Fenn and Co. the anti-Stoddart, even if the literary nationalists among them don't mean it as a compliment. For all the differences in business practices between the two distributors, nothing sticks out like the glaring discrepancy in their Canadian content.
Stoddart, too, used to be a distribution company that had grown prosperous on imported titles, before Jack Stoddart bought out his father in 1983 and began his involvement with Canadian writers. Stoddart knew cultural nationalists looked down their noses at the family firm in the 1970s, "especially young snots like me," recalls MacSkimming, who was at the time involved with New Press, which had a "short but glorious nationalistic life." Many in the literary world angrily reject the idea that mere involvement in Canadian fiction inevitably spells a life on the financial margins - if not outright doom - for anyone other than a multinational. Hushion is one. "Stoddart did work," he insists. "We've been with them since we started in 1995, and for five years everything went fine. It was the Chapters squeeze that got Jack." But others, with a nod to the profit and loss statements, think the desire to be a CanLit icon lies at the bottom of Stoddart's troubles.
It's a germane debate, given that Fenn also remembers the early condescension from publishers' reps, the snide references to "Fenn, the non-book people." And he, too, has heard the sirens' song. On April 1, Fenn picked up the distribution rights to Key Porter Books, a well-regarded Canadian house that barely escaped the Stoddart quagmire. "Anna Porter and I have talked probably for 10 years now," he says. "I've always had a lot of respect for her, the authors she's had. Her coming over sort of completes a circle for me - I wanted a Canadian literary press. The one thing that would top my career would be to own a Canadian imprint that has been and will be successful, whether its Key Porter or another. Our own little publishing program does all right, but it doesn't feel like real publishing, with well-known authors, design people and the rest." Warming to his theme, Fenn adds: "People say you can't run Canadian publishing at a profit. I think I can."
Does that mean a reckless, art-first, damn-the-bean-counters revolution in Fenn affairs? Hardly. Harold Fenn, as he likes to say about himself, is "from the retail side of things," and even as he has paid increasing attention to Canadian presses, what has caught his eye is "some of their titles ..." Words, unlike courtesy, temporarily fail him. "It's hard to see why they were published," Fenn concludes. (Polite again. He knows the answer perfectly well: government subsidies.) "I believe there has to be a market first." A laugh. "There's maybe some more merchandising in my blood than in some others."
And perhaps more, too, of a focus on the trade's true challenge - getting a grip on its supply chain. Fenn is five years into an effort to slash delivery times and improve order tracking. His ambition to double his sales volume over the next five years is, he says, merely the bottom-line requirement to afford the technology needed to stay on top. "We lost $3.5 to $4 million last year to American wholesaler Ingram, which is so automated that this afternoon it's processing this morning's orders. We can't match that yet, but we're close - today we're shipping yesterday's orders. I want to speed things up to where we get that $4 million."
Cutting down on returns - of the 15 million copies Fenn shipped out last year, 4.5 million came back - is equally crucial. The supply chain's vicious circle bedevils the entire industry. Booksellers have the long-established right to send back unsold volumes, which gives them an incentive to over-order to ensure they have enough copies. Enormous amounts of money in a low-margin business go into sending books on an endless circle ride. If Harold Fenn can slay the returns dragon and make a profit on Canadian books, he won't just be completing his personal circle, he'll be squaring the circle of Canadian publishing.
Maclean's July 22, 2002