HDA is Gone for Good. Don’t Expect to Get Paid.
Publishers not sheltered by a national distributor bad-debt agreement cannot expect to receive any money for product sold from HDA Inc., a distributor of specialty magazines and books to specialty stores.
"This is a great reason to keep distribution through your national distributor," a multi-title publisher commented. "Otherwise forget about getting paid for the product that you conceived of, created, published, paid for-and sold."
"They've continued to sell our magazine in their client stores the last 60 days, since they sent the WARN letter to their employees, since they laid everyone off, since they closed their doors," said a publisher of a large national specialty magazine. "They've been getting paid for it-we've sold 13,000 copies in that time. We won't get a penny of it. How is that fair?"
According to the WARN (Worker Adjustment and Retraining Notification) Act letter, HDA's 1664 employees are to be let go in stages, based on the workers needed to complete the tasks involved in the liquidation of the company. Despite HDA's attempts to obtain the financing to continue the business, the bank pulled the plug. The business will shut down completely, with secured creditors getting a fraction of what is owed and unsecured creditors-read, publishers-getting nothing.
According to the St. Louis Post-Dispatch (February 27), HDA has sold its magazine unit to TNG, the largest wholesaler in North America. However, according to a national distributor executive, "The business hasn't landed yet." Magazines are still at the printer, waiting to be released to the specialty stores, including Lowes and Menards, which HDA exclusively serviced.
(UPDATE: Lowes has just announced that it has awarded its magazine business to TNG.)
"Ever since they closed their doors, HDA has continued to collect from Lowes," said one unhappy publisher. "Sales have continued to go through the register, checks have continued to be sent out. Only the suppliers aren't getting a penny. The secured creditors-the banks-are getting paid for our sales. The rest of us are left holding the bag."
Linda Ruth, as president of PSCS Consulting (www.PSCSConsulting.com), offers communication companies worldwide the keys to magazine launches, search engine optimization and audience development online and at retail. She is a pioneer in the fields of Online Audience Optimization (OAO) and gamification for content publishers. Her books, "Internet Marketing for Magazine Publishers" ; "How to Market your Newsstand Magazine"; and "Secrets of SEO for Publishers" can be found on Amazon. Find her online at Google Plus, Magazine Dojo, LinkedIn, and Twitter @Linda_Ruth.