Harlequin Enterprises - International Expansion

International Expansion

Torstar Corporation, which owns Canada's largest daily newspaper, the Toronto Star, purchased Harlequin in 1981. The company began actively expanding into other markets. Although the authors of Harlequin novels universally share English as a first language, each Harlequin office functions independently in deciding which books to publish, edit, translate, and print, "to ensure maximum adaptibility to the particulars of their respective markets."

Harlequin began expanding into other parts of Europe in 1974, when it entered into a distribution agreement with Cora Verlag, a division of German publisher Axel Springer AG. The companies signed a two-year agreement to release two Mills and Boon novels each month in magazine format. The books sold well, and when the agreement came up for renewal Harlequin instead purchased a 50% interest in Cora Verlag. The new joint venture format allowed Harlequin to receive more of the profits, and allowed them to gain continued distribution in West Germany, Austria, and Switzerland. As of 1998, Germany represented 40% of Harlequin's total European business.

During this same period, Harlequin opened an office in Holland. Although this office lost money in its first year, by its third year in business it had accumulated a profit. In 1979, the company expanded in Scandinavia with an office in Stockholm. Expansion was rapid in both Finland and Norway. Within two years of its opening, Harlequin held 24% of the market for mass market books in Sweden. Scandinavia offered unique issues however, as booksellers refused to sell the category romances, complaining that the books' short life span (one month) created too much work for too little compensation. Booksellers and distributors also worried that the uniformity of the Harlequin book covers made advertising too difficult. Instead, Harlequin novels in Scandinavia are classified as magazines, and sold in supermarkets, at newststands, or through subscription. Harlequin has retained their North American style direct marketing. The direct marketing message is very similar in Scandinavia to that of North America, but the target audience differs a bit.

The fall of the Berlin Wall in 1989, gave Harlequin an opportunity to extend into previously closed markets. Cora Verlag distributed over 720,000 romance novels at border checkpoints to introduce East Germans to the company's books. The same year, Harlequin's German joint venture began distributing books in Hungary. Within two years, the company was selling 7 million romances in that country, and by the third year, Harlequin sold 11 million books in Hungary, a nation which at the time contained only 5.5 million women. At the same time, Harlequin's wholly owned subsidiary in Poland was able to order initial print runs of 174,000 copies of each title, and the Czech Republic was purchasing over $10 million each year of Harlequin novels. In 1992, Harlequin had its best year (as of 1998), selling over 205 million novels in 24 languages on 6 continents. The company released a total of 800 new titles in English, with 6,600 foreign editions.

Harlequin moved into the Chinese market in January 1995. In China, the company produced books in both Mandarin and English. Twenty titles were offered each year in Mandarin, with 550,000 copies offered of each. An additional ten titles were offered in English, with print runs of 200,000 copies each.

In total, Harlequin has offices in New York, London, Tokyo, Milan, Sydney, Paris, Madrid, Stockholm, Amsterdam, Hamburg, Athens, Budapest, Granges-Pacot and Warsaw, as well as licensing agreements in nine other countries.