The CEO of romance powerhouse Harlequin talks about selling sexier fiction

DONNA HAYES March 10 2003


The CEO of romance powerhouse Harlequin talks about selling sexier fiction

DONNA HAYES March 10 2003




The CEO of romance powerhouse Harlequin talks about selling sexier fiction

SOPHISTICATES like to make fun of Harlequin romances, but the bottom line is no joke. Harlequin Enterprises Ltd. is not only Canada’s largest and most profitable book publisher—it’s among the most profitable in the world. Founded in Winnipeg in 1949 and owned since 1981 by Torstar Corp., parent company of the Toronto Star, Harlequin sells its books in 131 countries and 25 languages. Lately it has been branching out from its traditional romance niche. Aiming for a wider audience, it has introduced new lines that are racier and more modern. Donna Hayes, an 18-year Harlequin veteran who became president and publisher a year ago and was last week promoted to CEO, recently spoke with National Business Correspondent Katherine Macklem.

What’s been your focus in your first year at the top?

Our rallying cry is that world domination of women’s fiction is our vision. For me, the number 1 thing is to be able to inspire everyone in our company to understand that shared vision.

What do you mean by women’s fiction?

Books by women about women for women. This is commercial women’s fiction, at the moment, not literary fiction. It’s anything from romance fiction, which is our roots, of course, and still a major part of what we do, to relationship novels, thrillers, mysteries, historical fiction and fantasy. When I came here, I was confounded by the fact that we sold books the same way we sold magazines. We had fantastic distribution, but our books were generally on shelves for four weeks, and then new books were put into place. So if you were a fan, it was very hard to go back and read other books by the same author. Our focus was much more on brand. Now, within our North American market, half of what we sell and half our profits are based on a more traditional publishing model, where we’re selling by author. For example, Erica Spindler is a very big au-

thor for us who writes romantic suspense— we publish her all around the world.

What’s the business objective? Is it to reach a younger audience?

No, a broader audience. We have only seven per cent of the women’s fiction market in North America. We’re tiny. So it presents this huge opportunity for growth for us. As a series romance business, we have virtually 100 per cent market share in North America. We’ve had almost 20 years of growth for Harlequin, which is phenomenal—but at five to six per cent, in revenue and earnings. The plan now is to do significantly better. Part of it is this single title business. Red Dress Ink is a line we launched a year and a half ago. Our intention—I guess the shorthand is Bridget Jones, or the chick-lit phenomenon—was to buy editorial that would be really appealing to young women, probably between 20 and 30. We started out doing one of these books a month. They were so successful we’ve already moved to two, and we’re going to three by year-end.

We’re doing a brand new one called Bombshell. You can think about it in terms of TV shows like Alias or Buffy the Vampire Slayer— shows for young women who really like adventure, who want to be in control of their own situation, and where romance is probably in it but a secondary part of the plot.

Do the new books follow a pattern as the traditional romance stories did? You know, girl meets boy, he’s nasty, she turns him around and they live happily ever after. Is there a formula for the other lines as well?

It’s a great myth that our books are written to a formula. They’re not. The one thing that is an absolute constant in our series romance books, always, is that there has to be a happy ending. That’s what we deliver, and promise to our reader. No question about that. But if you actually look at the characterization and the people who are in the books, they’re very, very different. Our readers understand that; non-readers tend

to look at them as a big category.

With the others, there’s a broader editorial content, for sure, and one example we like to use is a writer we have called Alex Kava, who writes really nasty books about serial killers. But they’re wonderful! I love to read them. But it would be hard to imagine something that’s more different than what you would think of as a typical romance.

Who are your readers?

I’ll use U.S. statistics because it’s a bigger market, but the same thing would be true in Canada. Our reader, for the most part, exactly mirrors the average person in the American census—same age, same household income. The one thing that sets her apart is she likes to read. Readers who buy through the mail tend to be older, readers who buy at retail stores—Wal-Mart or wherever—tend to be the average, and those who buy from our Internet sites tend to be younger.

Are all your writers women?

Almost. I met a great guy in England when we were throwing an author party last fall. He retired as a schoolteacher, and he was bored. But he always read his wife’s books and thought, “You know, I could write these,” and he has done it beautifully. He told me his wife was sometimes a bit shy about reading them. She didn’t know he actually thought about things that way.

We have one husband and wife team, who write under the name Tori Carrington. They actually have desks that face each other. They write each of their books together, they do a beautiful job, and they’re happily married 20 years later. I have no idea how, but they’re great!

Harlequin is known as Torstar’s cash cow. What do you think of that description?

The reason people used to reach for “cash cow” was the implication that we were low growth. That’s not the case. We’re almost half of Torstar’s revenue—about 42 per cent, but creeping up. And in fact, we’ve had a

couple of years of very strong growth, and we expect that to continue.

Although we’re small from a global sales perspective, one of the statistics I love is that our return on sales last year was over 18 per cent. Our closest competitor would be HarperCollins at 11 per cent—and they’re good—and then you get a bunch hovering down around five per cent.

What’s the secret?

I love to do this test if I’m giving a speech. I’ll say, “OK, how many people know who John Grisham is?” Every hand in the room goes up. “How many people know his publisher? ” Unless you’re in a publishing crowd, every hand goes down. “How many people know Harlequin?” Every hand goes up. So, incredibly strong brand names in Harlequin and Silhouette.

We don’t sell our rights to others—we keep all that publishing profit as we publish around the world. We are the only publisher that sells

only its own books in its book club. And our very specific niche focus just makes us more efficient.

Do you see getting into film or TV?

Not right now, but I wouldn’t rule out the possibility at some point in the future.

People sometimes think that what works in North America may not work in Japan or Europe or South America, but you’re not finding that.

No, we’re not. If you think about entertainment in general, if you think about Euro Disney or any of the really big writers like Grisham who get translated and sell really well, entertainment travels, actually, quite well. People’s basic human experiences travel around the world.

One of your new imprints, called Blaze in English, is called Sexy in Dutch. How sexy is it? Do you have guidelines?

For that line, which is our sexiest line, there are some guidelines: no one can get hurt, there have to be two people who are in a committed relationship and not having just casual sex. Anything on the other side of that line would not be suitable for the kind of values we have in the company. But if you read one of those books, they’re pretty hot. They sell the best of any line. And you know what? They really sell well on the Internet. Who’s buying the sexier books? We started out with a bias that it would be younger women. It turns out we were wrong. It’s women of any age.

Should we be surprised to find that women like sexy books?

Nope. Look at Sex and the City. Look at the kinds of television programming we’re all watching. Look at People magazine and the kind of photographs in it, and Us, which is a great one now. It’s part of the culture, so why should we be surprised? lil