Farewell the gentleman publisher: now read on

Books/ a British sell-out
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IT WAS a proud name and a long-established family firm, but now Macmillan has gone the way of more than 50 other such British publishers since 1980.

With its sale on Wednesday to the German company Holtzbrinck, for an estimated £200m, the largest remaining independent publishing house in Britain last week lost its independence.

It joins dozens of familiar names such as Hamish Hamilton, Routledge, Chatto & Windus, and Victor Gollancz; names which may still be on the spines of books but no longer represent the gentlemanly publishing world of former years.

Since the early Eighties the industry has witnessed extraordinary changes, as international media conglomerates moved into the book market in earnest. A frenzy of buying saw the ownership of classic UK names such as Collins depart across the Atlantic.

Rumours of a sale of the century-old Macmillan began circulating late last year. The firm, once chaired by former prime minister Harold Macmillan, traditionally pays very low dividends.

According to its chairman, Nicholas Byam Shaw, the family had decided to diversify its assets. Family members remain typically silent about the affair, but they are known to have secured a guarantee that the Macmillan name will continue.

Macmillan is the fourth largest publisher in Britain and interest in the sale was intense. American conglomerates Time-Warner and Paramount, and the German media group Bertelsman, all expressed a strong interest. It comes as no surprise that Macmillan's buyer is foreign, though a higher- profile name was expected. Little is known in Britain of family-owned Holtzbrinck.

The publishing world had been relatively stable until the early Eighties. The official City view was that book publishers were small, parochial and poorly managed. But as the decade moved on "information" became the buzz word, its value soared and books became hot property.

The table charts the activity that has taken place among the leading publishing names since1980. It is not an exhaustive list and there are other publishers with greater sales than some of those featured.

But the graph includes all the biggest names, plus some titles such as Faber & Faber which, though small in sales, enjoy a high literary profile in British publishing.

Derek Terrington, a publishing analyst at Kleinwort Benson, explained what went on: "There was a substantial trend towards building up media conglomerates, with a perception that publishing assets were undervalued. The whole information question became a big boom."

In many ways the industry was ripe for the taking. Often undercapitalised and run on idiosyncratic lines, small publishing houses were an attractive prospect to ambitious media groups such as Rupert Murdoch's News Corporation. Many businesses were crying out for new management. By 1987 the bidding had reached fever pitch. Jonathan Cape, Chatto & Windus, Bodley Head and Associated Book Publishers were all snapped up by North American firms for dizzying sums.

"Too much was paid for just about anything by 1987," said Derek Terrington. The spiralling bids came to an abrupt halt with the October stock market crash, but significant movement continued right up to the end of the Eighties, culminating in Murdoch's buy-out of HarperCollins. It was the grand finale for a decade which transformed British publishing forever.

Christopher Gasson, financial correspondent of the Bookseller magazine, believes the market's appetite for acquisitions was exhausted.

"Most of what was buyable was bought in the Eighties. And most of the companies which bought into the industry have found that they wasted their money. Trade publishing is a very attractive thing - it gets lots of column inches, people talk about books - but, in fact, it's very difficult to make any profit."

The big buyers have, nonetheless, eased British publishing into good health. Mr Gasson said: "Most of them have down-graded their expectations now, and are running their companies well. They have made some very necessary changes: they cut down on the sheer number of books being published, for a start."

But what of the future for British publishing houses? The Macmillan sale has raised industry fears that a new tide of foreign bids may begin. But Mr Terrington presents a different view: "The loss of British publishing houses does not mean a decline in British publishing. It may well mean a good thing. Families may run out of steam - it's part of the cycle of births and deaths of companies. Collins became part of News International and that caused a great panic, but it's done very well. There's always this pessimistic spin that people put on change."

There is, he and Mr Gasson believe, a great capacity for ill-placed sentimentality regarding the book business. And British publishing houses do remain buoyant. Reed continues to lead the way, and of the top 10 publishers in the UK, six are British. Peter Kilborn of the Publishers' Association is confident about the future: "We haven't been taken over by the Americans, or anyone else, yet. There's still a very wide spread of ownership and a lot of publishing in America is owned by the British. It is a very vigorous industry."

The market also remains eminently penetrable, as Dorling Kindersley has illustrated. Founded in the mid-Eighties, it is now a well-established and important player.

But such optimism is tempered. Last week did not just witness the sale of a great publishing name. It also saw Ringpull, a small, independent publishing company, scarcely three years old, go into receivership.