An unexpected twist to the Koen Book Distributors bankruptcy this summer is adding
to the frustration of some creditors who have already
suffered sizable losses: several small- and medium-sized publishers
have complained to Shelf Awareness that Baker & Taylor,
which bought Koen's inventory under the auspices of the bankruptcy
court, is trying to return for full credit some of that inventory. In
several cases, the books are being returned in Koen boxes or the
publishers' original packaging with labels to Koen still on the boxes.
Sometimes the number of books being returned is many times the number
of copies of the title that B&T has ever ordered.
Asked for comment, B&T chairman, president and CEO Richard Willis told Shelf Awareness, "Because of legal proceedings with the bankruptcy, I can't talk about that."
Several complaining publishers preferred to remain anonymous or not give details for fear of upsetting a major trading partner. One of these small houses said that B&T had bought fewer than 10 copies of one title and wanted to return "more than 200." The publisher, who refused to accept the books, said simply, "I don't think a publisher should take back books they haven't sold."
But two publishers spoke on the record and in detail about the problem.
'Insult to Injury'
When Koen went bankrupt this summer, John F. Blair, Publisher, Winston-Salem, N.C., was "left holding $42,000 in accounts receivable, a considerable amount," president Carolyn Sakowski told Shelf Awareness. Blair tried to buy back its inventory from Koen, which it used as vendor of record for Barnes & Noble, but the bankruptcy court was selling all of Koen's inventory in one lot. "That was $4.4 million we didn't have," Sakowski said.
(When Koen Book Distributors filed for bankruptcy and dissolved, it lost control of its assets. Besides selling the book inventory to B&T, the bankruptcy court sold some physical non-book assets to Levy Home Entertainment. Former Koen Book owner Bob Koen is now general manager of Koen-Levy Book Distributors, which has no connection to Koen Book Distributors or B&T.)
Two weeks ago, Blair received 75 cartons of returns from B&T, "about $23,000 worth of books," and "really excessive compared to normal [B&T returns]," she noted. "To add insult to injury, it was very obvious what they had done. They didn't bother to repackage the books. Our labels to Koen are still on some of the cartons."
In many cases, "B&T was returning more books than they had ordered," Sakowski continued. "B&T purchased 66 copies of one April title and returned 81."
Blair has begun a complaint procedure, following its lawyer's recommendation to "pursue a solution aggressively." The house has talked to several people, starting with the buyer. It's also photographed the boxes with the B&T labels over the original Blair labels for Koen and notified B&T that B&T will need to receive return authorization before shipping a return.
"We'll survive," Sakowski said, "but some publishers might not."
'Can This Be Ethical?'
Like John F. Blair, Camino Books, Philadelphia, Pa., used Koen as VOR for Barnes & Noble and had proportionally higher sales at Koen because of its regional emphasis.
B&T has returned a significant amount of inventory that Camino had sent Koen. "We have a list of the inventory at Koen at the time of bankruptcy and it matched perfectly the list of returns from B&T," publisher Edward Jutkowitz said. For example, in the case of Provider of Last Resort: The Story of the Closure of the Philadelphia General Hospital by Donna Gentile O'Donnell, a May title, B&T "bought three copies and wanted to return 165," Jutkowitz said. In another case, B&T returned 400 copies of an out-of-print title that it had bought one copy of in the past five years.
Jutkowitz has told B&T he won't accept any returns "unless they show proof of purchase." He predicted having a "protracted fight" and wished that he could have bought the books back from Koen. That aside, "My feeling is that they bought those books and should at least have tried to sell them," he said. "They're buying at remainder prices and trying to return for full credit. I don't see how that can be ethical."
Asked for comment, B&T chairman, president and CEO Richard Willis told Shelf Awareness, "Because of legal proceedings with the bankruptcy, I can't talk about that."
Several complaining publishers preferred to remain anonymous or not give details for fear of upsetting a major trading partner. One of these small houses said that B&T had bought fewer than 10 copies of one title and wanted to return "more than 200." The publisher, who refused to accept the books, said simply, "I don't think a publisher should take back books they haven't sold."
But two publishers spoke on the record and in detail about the problem.
'Insult to Injury'
When Koen went bankrupt this summer, John F. Blair, Publisher, Winston-Salem, N.C., was "left holding $42,000 in accounts receivable, a considerable amount," president Carolyn Sakowski told Shelf Awareness. Blair tried to buy back its inventory from Koen, which it used as vendor of record for Barnes & Noble, but the bankruptcy court was selling all of Koen's inventory in one lot. "That was $4.4 million we didn't have," Sakowski said.
(When Koen Book Distributors filed for bankruptcy and dissolved, it lost control of its assets. Besides selling the book inventory to B&T, the bankruptcy court sold some physical non-book assets to Levy Home Entertainment. Former Koen Book owner Bob Koen is now general manager of Koen-Levy Book Distributors, which has no connection to Koen Book Distributors or B&T.)
Two weeks ago, Blair received 75 cartons of returns from B&T, "about $23,000 worth of books," and "really excessive compared to normal [B&T returns]," she noted. "To add insult to injury, it was very obvious what they had done. They didn't bother to repackage the books. Our labels to Koen are still on some of the cartons."
In many cases, "B&T was returning more books than they had ordered," Sakowski continued. "B&T purchased 66 copies of one April title and returned 81."
Blair has begun a complaint procedure, following its lawyer's recommendation to "pursue a solution aggressively." The house has talked to several people, starting with the buyer. It's also photographed the boxes with the B&T labels over the original Blair labels for Koen and notified B&T that B&T will need to receive return authorization before shipping a return.
"We'll survive," Sakowski said, "but some publishers might not."
'Can This Be Ethical?'
Like John F. Blair, Camino Books, Philadelphia, Pa., used Koen as VOR for Barnes & Noble and had proportionally higher sales at Koen because of its regional emphasis.
B&T has returned a significant amount of inventory that Camino had sent Koen. "We have a list of the inventory at Koen at the time of bankruptcy and it matched perfectly the list of returns from B&T," publisher Edward Jutkowitz said. For example, in the case of Provider of Last Resort: The Story of the Closure of the Philadelphia General Hospital by Donna Gentile O'Donnell, a May title, B&T "bought three copies and wanted to return 165," Jutkowitz said. In another case, B&T returned 400 copies of an out-of-print title that it had bought one copy of in the past five years.
Jutkowitz has told B&T he won't accept any returns "unless they show proof of purchase." He predicted having a "protracted fight" and wished that he could have bought the books back from Koen. That aside, "My feeling is that they bought those books and should at least have tried to sell them," he said. "They're buying at remainder prices and trying to return for full credit. I don't see how that can be ethical."