We don’t have what we’d call a commanding grasp on the Quebecor story, but after talking to a few people yesterday the pieces are beginning to come together. The short version is that Quebecor, the Canadian printers who manufacture most of the comics from (at least) DC, Image and Marvel is in a financial crisis after years of mismanagement, and needs to either re-finance or file for bankruptcy. Matt Brady runs down the story and concludes that the impact on comics will be minimal:
Despite the rough seas it’s currently navigating, Quebecor is a huge, multinational corporation, and while what’s going on in regards to its finances isn’t ideal, desirable or even normal, it’s not unprecedented or a direct route to the end of the business. At the end of the day, Quebecor World will refinance its debt and move on (albeit with a limp, most likely) or it will further weaken, and be bought out by a competitor who will work to keep its accounts. Now, if that happens, there is a question about pricing pressure due to reduced competition, but even that’s still a far way off if it ever comes to pass.
While this is a sensible and level headed conclusion, folks we spoke to are certainly looking into their printing issues this week, and the company’s uncertain future is causing headaches at the very least.
Quebecor is part of Quebecor World, a multi billion dollar international conglomerate that employs some 28,000 people around the world. A series of bad investments and poor business decisions over the years have left it saddled with debt and unable to make its loan payments. Its stock has been delisted on the NYSE.
Quebecor spokesmen insist the presses will keep rolling, although there are many rumours regarding potential stoppages floating around — none of them sound very credible at this point.
One thing that did strike us as we spoke to people in various ends of the business yesterday was how suddenly this hit the comics industry. Quebecor has been struggling for a bailout for a year, and yet “I’ve talked more about Quebecor this week than I did in the previous year,” one printing industry insider told us. While comics publishers may not need alternative means of printing, its a sure bet that they are still looking into other printers, including Transcontinental and the Chinese printers who are increasingly taking over trade paperback publishing. Based on the number of complaints about production mistakes at Quebecor, some people will be happy to make a move.
While many comments on this story have pointed to the weak American dollar as part of the problem, it seems to be secondary to Quebecor’s ongoing bad business decisions. Should the printer declare bankruptcy or be acquired by another printer, contracts may need to be renegotiated — and the puny dollar leaves the potential for rising costs there.
So the word for now is no one knows how this will affect the cover price of comics; but the likelihood of a disruption in the timely flow of weekly floppies appears minuscule.
For more on the history of Quebecor’s financial problemsthis story from the Globe and Mail paints a colorful picture including father son conflicts and a riot by laid-off workers at a French plant. It’s a real how the mighty have fallen tale:
How did a company once held up by provincial premiers as an example of Quebec Inc.’s global clout get to this perilous point?
Quebecor World, which in 2002 laid claim to being the world’s biggest commercial printer, is now a penny stock with a market capitalization of barely $25-million. It is threatened with being delisted from the Toronto Stock Exchange. That is, if it manages to stay out bankruptcy court and remain a going concern.
The road since 2002 is littered with missed opportunities, poor decisions and enough internal bile to make the case study stacks at Harvard Business School – which happens to be the alma matter of Wes Lucas, 45, who suddenly quit as Quebecor World CEO last month on the heels of a couple of particularly fateful stumbles.