Wednesday, April 1, 2009

Rumbles from above.

One thing I wasn't looking out for, and I probably should have been, was trouble from above me on the food chain.

I inhabit such a small retail niche, that in most cases there is really only one supplier for each category. Hardy survivors, at that. After the collapse of the comic market in the mid-90's, there was only one survivor -- Diamond Comics, who had exclusives with Marvel, DC, Dark Horse and Image. That's 85% of the market, right there.


Up until the end, I supported Capital Comics, Diamond's main competitor, as much as I could. When they went under, I supported the next biggest supplier and so on.

Until there weren't any.

Diamond also bought the biggest game distributors, and renamed them Alliance. There are a few smaller distributors which I haven't used, because my game volume just isn't big enough.


When it came time to buy books, I approached Ingrams, but felt rebuffed. They wanted high guarantee purchases for a product line I was just starting. I could almost hear them sneering when I told them I was a comic shop. Baker and Taylor, on the other hand, actively welcomed me into their ranks.

Today, there was a story in the comic site, ICV2, which said:

"Baker & Taylor, a key distributor of books, DVDs and CDs, has denied reports that it is in danger of defaulting on its obligations or filing for Chapter 11 bankruptcy protection."

"Kuo told Home Media that B&T had been able to increase cash flow by 25% and had plenty of liquidity ($110 million), saying: “We are a long way from not paying our bills.”

Oh, oh. That can't be good.

I won't even go into all the rumbles about the weaknesses of book publishers. But if Borders give up the ghost, which I fully expect to happen this year, you have to wonder how that's going to impact on the entire book industry. Returns alone will be dreadful.

(Just as Gottshalks and Circuit City and Linens and Things all pretended that they had viable 'suiters' to buy their companies, but which folded, I think Borders is kidding us and themselves. They couldn't sell two years ago -- I see no chance that anyone would take on that red ink now....)

In sports cards, I have had a long journey with Roger of the Magazine Exchange. He started distributing cards just about the time I was getting into them. He provided me with pogs, and beanie babies, and non-sports cards, and more recently, card games.

He's a very savvy guy, but lately I've been wondering how he's weathering all this. Several brands were taken away, Wiz Kids for one, others have dwindled to nearly nothing. I used to depend on Roger to keep an eye out for the Next Big Thing, but there really hasn't been one since Pokemon started declining in Christmas of 2000.

He seems to be O.K., but unfortunately, he's a very small part of my business nowadays.


Part of the weaknesses in my distributors derives from the products no longer being 'hot'; Yugi oh and Pokemon, which have declined, sports cards which seem to continuing their long fall to zero, non-sports cards. Games, which are settling back to normal after artificial boosts. I think a sign of weakness is how much and how often good selling games are simply unavailable, which says to me the makers are being too conservative in their print runs. I haven't been able to get the new games Agricola or Dominion since they were released last year....


Some product lines are taken out of circulation completely, such as Wiz Kids, which was purchased by Topps Cards, and unceremoniously dumped. (Why do these companies buy brands only to kill them?)


One canary in the mine that I've been watching is non-sport cards. I quit buying these about 5 years ago, except when they go on 'Sale.' Which they almost always do. I can't afford to buy Twilight Cards, or Star Wars cards, and then have the customers ask me, "I bought these everywhere else, and now they're gone, so can you get them for me?"

Well, no. By the time you finally get around to me, the cards are either sold out, or not worth having.

But still, it was interesting to me that there still were several producers of non-sports cards. Whenever I looked at the sports cards and wondered how they were surviving, I could turn to non-sports cards and think: "Well, I can't sell ANY of these, and yet they're still making them."

Well, the biggest of these companies, Inkworks, just went out of business. They had a 'hit' in Twilight, but the flop of The Spirit pulled them under. (Obviously they were teetering if one license can kill them.)


Since I started, there has been at least three big card companies; Topps, of course, Donruss and Fleer, and a couple years later, Pinnacle and Upper Deck, and then at the peak, a plethora of companies (Score and Playoff and many others...)

One by one, they cracked. The 'brand' was bought by one of the bigger fish, carrying on the illusion that they were still alive, but really, Donruss and Fleer and Score aren't independent companies anymore.

For the last few years, there has been Topps, Upper Deck, and Playoff. Upper Deck played power politics, and forced Playoff out of the baseball license.

Recently, Playoff sold to Panini, an Italian sticker company of all things. (I'm guessing they got a rock-bottom price, maybe for the printing facilities -- I can't imagine Panini is excited about jumping into the American sport card market....I expect they'll be going away.

Meanwhile, Upper Deck has always been a bit of a fraud in my eyes. Always looking for ways to scam the market. (Obviously, I don't think much of them.) Meanwhile, Topps was bought by Michael Eisner, who used to run Disney, and I suspect he'll try to leverage it into a 'multi-media' conglomerate. (Which has been tried many times before -- the big tycoons mistake the 'fame' of licenses like Topps or Star Trek as indications of actual sales, I guess.)


The owner of Diamond Comics is a former Baltimore mailman, named Steve Geppi. Fortunately, he has been a benign dictator, and I think handled his power well and faithfully. Personally, I think he's done a great job.

But I noticed along the way, that he was starting to live the high life. He became part owner of the Baltimore Orioles, started a huge and fancy Comic Museum, (Called -- red lights and sirens -- Geppi's Entertainment Museum -- and started buying up orphan properties. He bought Gladstone, which produces Disney comics in the U.S. as well as EC Reprints, and most importantly, the Overstreet Price Guide, the Blue Book of comics.

He also became the toymaker of last resort. After Buffy or Stargate or Battlestar Galactica were turned down by the big boys, he produced them for the comic market. Even the venerable Star Trek -- which has gone through 5 or 6 different card makers, toy makers, comic publishers and failed every time. (NO ONE is more choosy than a Trekkie -- NO ONE! Like non-sports cards, I only carry Star Trek when it's on sale. With the notable exception of right now cause of the new movie.....)


There have been rumors that the rent hasn't been paid for the Geppi's Entertainment Museum. The Overstreet Price Guide seems to be MIA. The Disney comics have slowed to a trickle...and the latest information is that they will be stopped altogether. (Disney comics sell in Europe, but strangely, not in the U.S.A. I keep telling you guys, and no one believes me, kids just don't read comics anymore....)

One of the gossip sites is talking about Diamond suddenly having to deal with a surge of late or non-payments from comic shops.

These signs are giving everyone in the comic industry the willies. DC Comics has the option of buying Diamond, but you have to wonder if they'd want to, and wonder how Marvel would react.

But if it has to be done, I suspect is would be.


Comics are currently 30% of my sales, a very significant number, but not large enough to kill me. I have purposely diversified over the years. Graphic Novels, which are available from Book Distributors, are another 25% of my business. The rest is pretty evenly divided among: books, new and used; card games; games, rpg and boardgames; toys; cards, sports and non-sports and anime.

It'll be a hassle, but ... well, when hasn't it been?

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