FTSE-listed Bloomsbury Publishing (GB:BMY), best known for being the publisher of author J.K. Rowling’s Harry Potter book series, has signed a last-minute supply deal to keep its titles available on Amazon (AMZN).
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Fears that a deal to renew a supply contract with Amazon UK would not be reached after months of discussion were heightened on Thursday night when the online giant released a forceful statement declaring, “Despite our best efforts over the last seven months, Bloomsbury has refused to engage in a good faith negotiation to discuss a new contract to sell their titles in our store.”
This would have meant Bloomsbury’s print titles in the UK, Europe, and Australia and its Kindle titles being pulled from Amazon stores worldwide from as early as midnight last night.
Bloomsbury Eases Supply Chain Fears
This morning Bloomsbury eased the concerns of its investors and invisible cloak/magical owl devotees by stating that it “has reached a new long term supply agreement with Amazon.”
The publisher, which also publishes a range of academic titles and novels such as Sarah J. Maas’s Throne of Glass, reiterated its confidence in the market consensus for its full-year sales outlook of £334 million and profit of £39.6 million.
Amazon and Other Retailers Get the Message
Russ Mould, investment director at AJ Bell, said, “Bloomsbury getting into a fight with the world’s biggest bookseller over contract terms was a risky move and one that could have backfired dramatically.” Mould added that denying sales of Bloomsbury’s titles on Amazon could have weighed on the company’s earnings, given the number of people who buy books from the e-commerce giant’s platform.
However, he said that the mere fact that Bloomsbury was able to challenge Amazon indicates its solid positioning in the publishing world. “It certainly sends a message to other retailers that Bloomsbury is not a pushover,” said Mould.
Is BMY Stock a Good Buy?
On TipRanks, BMY has a Moderate Buy consensus rating based on two Buy recommendations. The highest price target is 852p. BMY stock has a consensus price target of 838.5p, which indicates 24% upside potential.
