Collier Books

in 1949, P.F. Collier and Son published Collier's Encyclopedia, an entirely new, 20 volume work, with the first volumes available in 1949 and all volumes published by 1951. With Encyclopedia Americana and Encyclopædia Britannica, Collier's Encyclopedia became one of the three major English-language general encyclopedias.

1950s magazine closures and book profits

In the late 1940s and up to the mid-1950s, Crowell-Collier's magazines enjoyed healthy subscription numbers, over 4 million subscribers for both Collier's and Woman's Home Companion. However, declining advertising revenues, as advertisers moved from magazines to television, and increased manufacturing and delivery costs, led to heavy losses. In 1953, Crowell-Collier named a former editor of the San Francisco Chronicle, Paul C. Smith, as its president, and later, as chairman, with a mission to save the ailing magazines. Nevertheless, in 1956, Crowell-Collier's magazines lost over $7 million. By December 1956, the company discontinued The American Magazine, Collier's, and Woman's Home Companion. The company also closed its Springfield, Ohio plant, which at one point had employed more than 2,000 people. The magazine closings shocked both publishers and readers. Many in the magazine field deemed it "a foolish and impetuous move", but as the company moved to focus on publishing books and educational materials, the move was seen as shrewd and far-visioned.

Even as Crowell-Collier closed its magazines, Collier's Encyclopedia was proving highly profitable for P.F. Collier and Son. Under the leadership of P.F. Collier and Son's president, John G. Ryan, sales of Collier's Encyclopedia increased substantially during the 1950s, rising from 46,374 sets in 1953 to 110,688 sets in 1957. In 1956, John G. Ryan reported a net profit of 20% of on $25 million in sales revenue. supplying the revenue that kept Crowell-Collier solvent as it suffered huge losses from its failing magazine business.

In 1957, outside investors seized full control of Crowell-Collier and installed a new chairman, a paper bag company executive with no prior publishing experience. He pressured P.F. Collier and Son to loosen its sales practices and customer credit standards, and to cut Collier's Encyclopedia's editorial budget. John G. Ryan demurred at abandoning his successful business model and continued generating record profits, including a 20% increase in the first quarter of 1959. Nevertheless, on April 2, 1959, the Crowell-Collier chairman fired Ryan and assumed personal direction of P.F. Collier and Son.

Ryan's removal had significant consequences. At a highly publicized April 1959 meeting with Crowell-Collier shareholders, the chairman proved unable to comment on any aspect of company operations. Ryan was soon hired as president of a subsidiary of Grolier Incorporated, publisher of the Encyclopedia Americana. Numerous sales and administrative managers quit P.F. Collier and Son to join Ryan. In December 1960, Crowell-Collier merged with P.F. Collier and Son, ending the weakened subsidiary's 85-year existence. Crowell-Collier assumed the liquidated firm's publishing, editorial, and highly profitable sales financing activities. A new subsidiary, P.F. Collier, Inc., was formed, but solely as a sales organization. P.F. Collier, Inc. expanded sales of Collier's Encyclopedia during the 1960s, but deceptive sales practices, encouraged by the Crowell-Collier chairman, ultimately led to a Federal Trade Commission complaint against the company, and crippling regulatory restrictions on its door-to-door encyclopedia sales.

1960s and expansion as educational publisher

With profits from sales of Collier's Encyclopedia enabling Crowell-Collier to recover financially from its magazine losses, new opportunities arose. Under the prodding of Loeb, Rhoades & Co. senior partner, and Crowell-Collier director, Armand G. Erpf, Crowell-Collier used its encyclopedia sales earnings for a program of mergers and acquisitions. Leaving behind its roots in magazine publishing, it now focused on the growing market for education produced by the baby boom in the United States. Sales continued to surge for reference books, textbooks, and encyclopedias In 1962, the company published a new, 24-volume edition of Collier's Encyclopedia.

1970s

By the start of the 1970s, Crowell Collier & Macmillan was now a $400 million multinational producer of books and educational materials. Crowell Collier & Macmillan decided to change the name of the company to Macmillan, Inc. First, though, they encountered a legal battle over the name with Macmillan Publishers Ltd. of London—who had spun-off the original American Macmillan in 1896 and sold its stake in 1951. For the name to take effect on January 1, 1973, the companies agreed to some conditions including the American company using Crowell-Collier or another name to distinguish the businesses in which the British Macmillan operated (as an example, the Canadian division of the American Macmillan assumed the legal name of Collier Macmillan Canada, to disambiguate it from the British Macmillan subsidiary, Macmillan of Canada). The British Macmillan stated that the name had already been causing confusion with the public resulting in misdirected book orders and the fear that the American company was planning to use the name to compete unfairly in markets where the British company was active. The case cited the Lanham Act, the trademark act of 1946.

This was not the only legal battle that the now Macmillan, Inc. faced at the start of the seventies. Macmillan sued Charles F. Berlitz, grandson of the founder of Berlitz to prohibit him from using the Berlitz name in travel and writing businesses. Berlitz won the lawsuit and was awarded $376,000 and the right to use his name as an author of books on foreign languages. The Justice Department filed a civil anti-trust suit against Crowell, Collier & Macmillan, Inc. in 1970 and requested that it divest itself from C.G. Conn, Ltd (a manufacturer and retailer of musical instruments) and Uniforms by Ostwald, Inc. (manufacturer and retailer of band uniforms).

Crowell-Collier was also under fire by the FTC again in 1972 and accused of using deceptive practices in selling its The Harvard Classics and in billing encyclopedia buyers and also in recruiting of encyclopedia salesmen. Of The Harvard Classics, the FTC stated that while the company marketed that one or several volumes were offered free or for $1 each "with the understanding that additional volumes priced at $3.98 would be shipped periodically for free examination", many volumes would be shipped in a bulk shipment. Buyers were subjected to repeated mailings of bills. Crowell responded that they had already discontinued The Harvard Classics "continuity" program and that any "isolated" occurrences or procedures had been changed. For the encyclopedias, Crowell was accused of raising the price on Encyclopedia annual supplements called Yearbooks. They were also accused of advertising positions for encyclopedia salesman as "administrative assistant trainees" and "marketing and public relations personnel". Crowell issued a statement disavowing any violations but agreed to negotiate a consent order.

Martin Gardner protesting Crowell-Collier's publishing of the psychic surgeon John G. Fuller's book Arigo withdrew publication of his own (Gardner) book.

Macmillan was once the American division of the British Macmillan Publishers (opened in 1869) and had been run by generations of the Brett family who eventually took over the operation of the company from the British in 1896 (British Macmillan Publishers kept its stake in the American operation until 1951). Macmillan published some notable authors including Jack London, Margaret Mitchell, and Winston Churchill.

By 1960, the majority of Macmillan's sales came from textbooks and for Macmillan the merger meant access to cash and capital to grow their textbook market. Crowell-Collier ran Macmillan as a subsidiary but in 1965 Crowell-Collier officially changed its name to Crowell Collier & Macmillan, Inc. Publishing was dropped from the company name to reflect its broadened scope into education.

The merger with Macmillan was followed by a flurry of other mergers and acquisitions, all money makers for Loeb, Rhoades & Co. Of Crowell-Collier's acquisitions, Erpf proclaimed, "My main interest is Loeb, Rhoades. After all, everything starts from there." Crowell-Collier's corporate strategy remained less clearly defined. Raymond C. Hagel, who became Crowell-Collier's chairman in 1964, said, "We envision our major role as that of a developer of complete educational systems." That system was a "unified instructional package involving a variety of tools." and "the business of education has become a successor to the defense industry. It is a security lifeline."

Crowell would end the decade as Crowell Collier & Macmillan, a highly indebted conglomeration of subsidiaries that included books, schools, magazines, educational tools, bookstores, book clubs and radio stations and with an annual revenue of $390 million. But, as one analyst wrote of the company, "it takes one kind of talent to buy everything in sight with easy money and another kind to operate the creation when the financial momentum shifts into reverse." Prodded by Armand G. Erpf and other investment advisors, Crowell Collier & Macmillan's management had the talent to buy businesses, but questionable skill at operating them. When profits from encyclopedia sales ebbed in the early 1970s, the highly leveraged conglomerate was in trouble. In 1973, Macmillan, with its traditional business, domestic publishing, amounting to only 25% of revenues, reported a profit of a mere $16.7 million on $420 million in sales. By comparison, the company's former profit center, P.F. Collier and Son, had managed over $5 million in profit in 1956 on sales of just $25 million. Crowell Collier & Macmillan had financed its 1960s expansion with a mountain of debt, amounting to $75 million in 1973, and interest on the debt proved a heavy burden.