Dawson Holdings PLC

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Dawson Holdings PLC

AMP House, 9th Floor
Dingwall Road
Croydon CRO 9XA
United Kingdom
Telephone: 44 20 8667 0770
Fax: 44 20 8774 3010
Web site:http://www.dawson.co.uk

Public Company
Incorporated: 1891
Employees: 3,393
Sales: £626.6 million (2000)
Stock Exchanges: London
Ticker Symbol: DWN
NAIC: 42292 Book, Periodical, and Newspaper Wholesalers; 54187 Advertising Material Distribution Services; 54189 Other Services Related to Advertising; 56142 Telephone Call Centers

Dawson Holdings PLC operates the third largest newspaper distribution company in the United Kingdom, Surridge Dawson Ltd. Other Dawson subsidiaries distribute books, magazines, travel brochures, and inflight reading materials, and offer marketing and telephone call-center services. The publicly traded company sold off its library services and academic journal subscription fulfillment subsidiaries in 1999.

Early Years

Dawson Holdings traces its beginnings to the year 1809, when William Dawson established a bookselling and newspaper distribution business in the city of London. Finding a ready market, Dawson soon began distributing London papers to outlying provincial areas. In the beginning the newspapers were transported on horseback, but in 1825 Dawson began shipping them via coach. William Dawson’s family continued to run the business through much of the 19th century, until 1891 when the Sampson Low publishing organization took control of the firm. Following the transfer the company was formally incorporated.

In 1895 Dawson opened a new branch in London to deliver papers to businesses and government agencies. Over the next several decades the company broadened its geographic reach, opening wholesale offices in Cardiff, Wales, and Exeter and Leicester, England. These were later joined by others, including branches in Brighton and Barnstaple. In 1921 the firm also opened a branch in Paris named Messageries Dawson SA.

In 1934 the company’s wholesale newspaper business was merged with that of P.W.J. Surridge & Sons, Ltd. to form Surridge Dawson & Co. Ltd., which continued to serve London and outlying areas. The combined firm moved its headquarters at this time to a larger space on Blackfriars Road in London. Over the next few years Surridge Dawson acquired several other news wholesalers in Southampton, Folkestone, Lit-tlehampton, and Southend. Dawson also continued to operate its book wholesaling operation during this time, which specialized in servicing libraries.

Surviving the Blitz: 1940s-50s

World War II affected Surridge Dawson dramatically, with the Blackfriars Road facility bombed on several occasions. To continue to serve its customers, the company arranged to transfer operations to several temporary locations, including the Daily Mirror building. The firm weathered the hostilities, and following the war its business picked up, such that larger quarters were soon required.

During the 1950s Surridge Dawson opened more branches in Boston, Chatham, Hitchin, Skegness, and Wicanton. The latter incorporated a printing company, later named the Surdaw Press, which Surridge Dawson used for its own printing needs. Expansion continued during the early 1960s through a series of acquisitions. In 1963 Abel Hey wood & Son, Ltd. of Manchester was purchased, giving the firm one of northwest England’s three largest wholesale agencies. Surridge Dawson subsequently expanded further in this region, buying eight more smaller companies, as well as five others in the rest of the United Kingdom. British newspaper wholesalers also undertook their first major “rationalization,” in which geographic territories were divided between the competing firms.

Focusing on Provincial News Distribution: Mid-1960s-80s

By the mid-1960s newspaper wholesaling in the city of London had become a difficult business to make a profit in. In an attempt to remain viable, Surridge Dawson merged its London operations with George Vickers of Brixton to form Surridge Vickers Ltd. Cost-cutting efforts were made, but the venture remained a money-loser and Surridge Dawson subsequently withdrew from the London market to concentrate on its regional operations.

During the 1970s and 1980s Surridge Dawson continued to acquire other small newspaper wholesale companies. During this period the company shifted its distribution from the by now standard rail transport to trucks. Surridge Dawson also took on considerably more Sunday newspapers than it had before.

In 1985 Dawson Holdings acquired McGregor Subscription, Inc. of the United States, a library services firm. Dawson also added to its book distribution business through the 1991 acquisition of Bumpus, Haldane & Maxwell Ltd.’s book wholesaling operations. The company had by now begun offering online services to businesses and libraries in the United Kingdom, France, and Spain through its Dawson Europe Ltd. subsidiary. In 1993 Dawson Europe won a contract to market OCLC’s FirstSearch online news and journal database to its European customers.

The following year Dawson purchased a major U.S.-based library subscription firm, The Faxon Company, Inc., for £9.4 million. The acquisition made Dawson the second largest library subscription fulfillment company in the world, with some 36,000 customers around the globe. Faxon subsidiaries acquired included Faxon Canada and the Turner Subscription Agency. Dawson also bought a Spanish company, Madrid-based Libreria Ciencia Industria (LCI), during the year.

Going Public: 1995

In June 1995 Dawson began selling shares on the London Stock Exchange’s newly formed Alternative Investment Market. The price of the stock quadrupled over the succeeding 18 months as the firm reported consistent profits and rising dividends. In the summer of 1996 Dawson Holdings acquired the remaining 57.5 percent of Surridge Dawson, making it a full-fledged subsidiary. The company paid approximately £15.4 million to buy out P.W.J. Surridge. The deal made Dawson Holdings the U.K.’s third largest newspaper distribution company, with 14 percent of the market.

In 1997 Dawson launched three online information services in the United States for library customers, including Information Quest, which offered eight million table-of-contents entries from more than 12,000 international journals. Access to the abstracts or full text of the articles was available for a fee via several delivery methods. During the year Dawson also purchased the news wholesaling operations of British newspaper and magazine distributor Johnsons News for £32 million. Johnsons was the fourth largest company in the British news distribution marketplace, with six news depots in the south of England, and its operations were folded into the existing Surridge Dawson system.

Difficulties integrating Faxon into the company forced Dawson to forecast a downturn in earnings from its library services business in early 1998, and the stock price quickly lost more than 15 percent of its valuation. That year also saw the firm settle a lawsuit that had arisen out of the Faxon acquisition with several of the latter firm’s vendors. The out-of-court settlement was for a reported £5 million.

In the summer of 1999 Surridge Dawson completed a new “superhouse” distribution facility in London, Premier Park, which consolidated the operations of several smaller locations. It was reportedly the largest news distribution site in the United Kingdom, handling 500,000 papers that were destined for 2,000 newsagents around London, which the firm had resumed servicing in the years since its late 1960s withdrawal. Surridge Dawson was also operating 17 other news distribution depots around the United Kingdom. Immediately following Premier Park’s opening, problems surfaced that resulted in delayed or cancelled deliveries. Surridge Dawson issued a public apology and also made a payment to the Newsagents Federation to salve the wounds of unhappy vendors.

Sale of Information Services Group: 1999

Dawson’s 1994 acquisition of Faxon had not been entirely successful, partially because Faxon brought its own difficulties into the equation, and partly because the library services market was becoming difficult to draw a profit from. As a result, Dawson’s bottom line was taking a continuing hit, so in the fall of 1999 the company reached a deal to sell off its entire Information Services Group for £34 million. The buyer was RoweCom, Inc., a Cambridge, Massachusetts-based library services firm run by a former owner of Faxon. Dawson units sold included Dawson Information Quest, Dawson UK, Faxon Canada, Ltd., Faxon Company, Inc., and Turner Subscription. The company continued to offer book distribution services to libraries in the United Kingdom and Europe.

Company Perspectives:

Dawson Holdings will provide quality logistic and marketing support services that meet the real needs of all our customers. This objective will be achieved by the effective utilisation of the skill set and knowledge base of all our employees and by continual focus on understanding our customers’ needs. We will achieve industry benchmark levels of efficiency by the effective use of technology, the elimination of duplication and waste, and the application of process improvement techniques. We will maximize our shareholder value by a complete dedication to the achievement of our corporate objectives and delivery of sustained real growth.

Following the sale, Dawson acquired BFG Holdings, Ltd. Group, which operated four travel brochure distribution and telephone call center businesses. Soon after, four companies owned by Johnsons Group, Ltd. were also purchased. These included Johnsons Inflight News, which supplied reading materials to airline lounges, planes, and Eurostar trains; Johnsons Services News, a supplier of magazines to armed services bases; Johnsons Sporting News, which serviced British betting shops; and Johnsons Subscriptions, a subscription fulfillment and marketing services firm. The BFG and Johnsons deals were valued at £12.4 million and £14.3 million, respectively.

The acquisitions continued in 2000, with additional complementary companies brought into the fold, including Martini Airport Services and Bridge Marketing Support Services. Bridge was merged into the BFG businesses, now known collectively as Dawson Media Services, while Martini was placed with Johnsons Inflight into the division called Dawson Media Direct. Marketing services offered by Dawson companies included point-of-sale advertisement placement and checking, mailing and multifaxing, mail-order fulfillment, designing and printing, and database management.

The year 2000 was a difficult one for the company. A U.S.-based software firm Dawson had formed, EOSi, proved unprofitable and was sold to the latter’s management. A battle between the top news distributors also erupted, after market leader W.H. Smith announced plans to create a national magazine distribution network, leapfrogging the regional, “rationalized” one that existed. Both Surridge Dawson and John Menzies, the number two firm, threatened to take Smith to court, and a major newspaper publisher also announced it would withdraw many of its titles from Smith if the plan went through. Though some large retailers were in favor of the national network, smaller independents and publishers both expressed fears that a large number of independent news agents would fold if the present system was changed, serving to decrease overall news and magazine sales in the end. After a few stormy months, Smith announced it was looking for a buyer for its distribution arm, and the attempted realignment was shelved.

Dawson’s library book sales division was proving to be a bright spot for the company, however, with the successful introduction of a new web-based ordering service, enterBooks.com, proving both profitable and efficient operationally. Introduced in December 1999, it was followed by enterProfile.com in 2001, which enhanced and added to the enterBooks system. The book division had grown to include four subsidiaries by 2001, located in France, England, Spain, and the United States. In addition to distributing books, Spanish arm Dawson Espana offered other library services including management and accounting systems, while Quality Books in the United States was a major distributor of small press book titles, videos, and audio recordings on informational and educational topics.

Approaching the end of its second century in business, Dawson Holdings was continuing to grow and change as it worked to improve its bottom line. Attempts to find additional sources of revenue were ongoing, with the acquisitions of BFG Holdings and the Johnsons companies providing new directions for the company to pursue.

Principal Subsidiaries

Surridge Dawson Ltd.; Quality Books, Inc. (U.S.A.); Dawson Espana (Spain); Dawson France (France); Dawson Books UK; BFG Holdings, Ltd.; Johnsons Inflight News; Johnsons Sporting News; Services News; Johnsons Subscriptions; Martini Airport Services; Worldwide Magazine Distribution; Bridge Marketing Support Services.

Principal Competitors

W.H. Smith PLC; John Menzies PLC; Lagardere SCA; Baker & Taylor Corporation.

Key Dates:

1809:: William Dawson forms a bookselling and newspaper distribution firm in London.
1891:: Business is purchased by Sampson Low publishing organization and incorporated.
1934:: Surridge Dawson & Co. is formed as a joint venture with P.W.J. Surridge & Sons.
1940-45:: Company offices are bombed during World War II, forcing a move to temporary quarters.
1950s-60s:: Company expands via opening of new branches and acquisition of smaller distributors.
1967:: Surridge Dawson exits London newspaper distribution business.
1994:: Library service provider Faxon Company is acquired.
1995:: Dawson Holdings goes public.
1996:: Remaining portion of Surridge Dawson is purchased from P.W.J. Surridge.
1997:: News wholesaling arm of Johnsons News is purchased for £32 million.
1999:: Dawson exits library services market with the sale of Faxon Company and purchases travel-related publishers Johnsons Inflight and BFG Holdings.