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Recession Watch: Baker & Taylor fights lowered rating

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Well, this can’t be good. Baker & Taylor, the self-proclaimed “world’s largest distributor of books and entertainment”, insists they aren’t in trouble, even though their credit rating has been downgraded. On February 20th, Moody’s lowered B&T’s default rating to B3, due to the distributor’s rising debts. A B&T spokesperson denies they are in danger of defaulting or bankruptcy.

Kimberly Kuo, EVP of marketing with Baker & Taylor, said the rating didn’t properly reflect the distributor’s daily operations and instead based its speculative outlook on the economic downturn at the end of 2008.

She said a lot of high-profile companies have joined Moody’s watch list during the recession, including some considered at extreme high-risk to others regarded as more secure. Kuo said the list was fluid and updated regularly.

“We are focusing heavily on working capital, which has helped generate cash, reduce debt levels and maintained the company’s leverage ratio,” she said.


Kuo goes on to say that the company has plenty of liquidity and is in no danger of not paying the bills.

B&T sells vast amounts of books — including graphic novels — to both bookstores and libraries. Let’s just say this developing story bears continuing scrutiny.

  1. what about the news story about LA’s GOLDEN APPLE being sold in order to avoid closing due to owing Diamond $100,000?

  2. My first thought when reading this story- why is the EVP of marketing doing the response? Isn’t there a CFO over there in charge of financials? That would seem to be the more logical source for a response to credit issues.

    Worrysome. If they go out, not only are bookstores and libraries at risk, but all of the smaller publishers who decided to diversify their revenue by depending on the bookstore market are in trouble.

    Yeesh.

  3. Oh come on now, Ed, like what is perhaps the biggest book distributor to the retail and library market having money problems isn’t going to make every site that covers business news?

  4. I see that Baker & Taylor has a checkered past. The company changed ownership in 2006, 2003, and 1992. The lowered rating by Moody’s, — S&P has lowered two B&T ratings as well — might have been based on an 18 percent drop in sales for the six-month period ended Dec. 26. A Billboard article offers financial details, but people who aren’t used to “EBITDA” and other financial terms won’t get much out of it.

    SRS

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