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The publishing house that Stieg Larsson built

When Quercus bought 'The Girl with the Dragon Tattoo' it was a tiny firm in a rented office. Yesterday, from its West End HQ, it revealed record sales of £15m a year

When a backstreet publisher based near Baker Street, London, bought the rights to an obscure Swedish crime novel written by an unknown author who had died years earlier, it struggled to get it on to bookshop shelves.

Mark Smith, who founded Quercus in 2004, became so desperate to shift copies, which some retailers refused to stock, he gave them away to people reading in parks – and planted dozens of more on the back seats of taxis and on Tube trains. "At that stage we were giving away more than we sold," Smith says. "It was getting pretty nerve-racking."

Fast forward to the present day and Smith's nerves have been calmed by news that the phenomenal success of Stieg Larsson's Millennium Trilogy has helped his independent publishing house, which has since moved to its own rather-more-opulent offices on Bloomsbury Square, has recorded a huge jump in profits. Revenues at Quercus almost trebled to £15m in the first six months of 2010 from a year earlier and the company's share price jumped from 12p to 74.5p.

"Before Larsson, we were constantly having to prove ourselves. As a new start-up we weren't high up agents' lists and had to work really hard to convince authors to sign. It was difficult," Mr Smith says. "Everyone dreams of signing the next blockbuster, the next Harry Potter – and we did. I've had colleagues who have been waiting 25 years for such a hit."

The Millennium Trilogy, which started in 2005 with the release of The Girl With the Dragon Tattoo, has sold millions of copies and made Swedish author Stieg Larsson a household name. His books have all topped fiction charts in the UK and the late author is the first to sell more than a million Kindle ebooks through Amazon. Movie deals, including an upcoming English remake set to star Daniel Craig, have helped turned Quercus into Britain's fastest-growing publisher, emulating the success of Bloomsbury, which rocked the industry when it signed J K Rowling and the Harry Potter books.

Quercus started life modestly in 2004 after Mark Smith and Wayne Davies defected from Orion Publishing Group. Suitably, for a company that would later publish a phenomenon in crime fiction, they rented a small office round the corner from the fictional premises of Sherlock Holmes on Baker Street.

"I wanted to start my own business and foolishly thought it would be easy," Smith recalls. The company focused on non-fiction books that could be nicely illustrated. Its first success was Universe, followed by Speeches that Changed the World.

But Smith had an appetite for risk and two years after launch moved into fiction, signing 10 titles from first-time authors. One of its early successes was The Tenderness of Wolves by Stef Penney, a mystery set in the snowy wastes of Canada in 1867. The novel won the Costa Book Award in 2007, driving it up the bestseller charts and allowing its publisher to expand. What had been a staff of 15 people has since grown to 40.

The turning point for Smith came when he recruited Christopher MacLehose, who had a reputation as a master at finding foreign fiction by writers such as Henning Mankell and Haruki Murakami and turning them into English language hits.

MacLehose's first signing was a Swedish crime thriller called Men Who Hate Women written by a journalist who had died in 2004. The deal handed Quercus the global English language rights for the book that would turn into The Girl with the Dragon Tattoo. Larsson's books had already "gone crazy" throughout Scandinavia, Mr Smith said, with sales hitting 3 million in Sweden and outselling the Bible in Denmark.

But British publishers got cold feet. "That Larsson had passed away was a problem, as publicity is very important in getting a new book off the ground," Smith explains. "There are tough themes in the book and many were put off by the title. It's also rare that a European success translates into the English-speaking market." While he regrets never meeting the author, he admits that "if he was alive, we probably would never have snapped up the rights".

The hardback edition of The Girl with the Dragon Tattoo failed to cause much of a stir when it was published in January 2008, selling around 8,000 copies. "The paperback that followed in the summer did okay but was nowhere near as popular as elsewhere in Europe," Mr Smith added.

The publisher failed to get the books into prominent positions in the shops, and some refused to stock it. One prominent retailer, who Mr Smith declined to name, said its customers "don't like authors with funny names".

The company was desperate to push the title and its employees were forced into drastic measures to get copies into the hands of the public, including the give-aways on trains and buses. Those proof versions are now probably worth fortunes.

The modest marketing approach worked; The Girl Who Played with Fire, the second in the trilogy, became the first translated book to top the hardback best-seller charts. "People started reading the book and talking about it in 2009," Smith says. "That's when it gained momentum." The third book's hardback edition sold 225,000.

Sales are expected to soar further after next year's Hollywood treatment but Smith already has his sights on his next big Scandinavian crime novel, Three Seconds, a thriller written by a journalist and a former criminal.

"The Millennium Trilogy has created a halo effect," Mr Smith said. "We are being approached by more authors and agents, and have been getting books into supermarkets and other places where we struggled before. Larsson put us in the map in many ways; we are not a small independent any more."