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The Honolulu Advertiser
Posted on: Saturday, March 28, 2009

Magazine delivery resumes for many

By Andrew Gomes
Advertiser Staff Writer

Hawai'i's main retail supply of magazines is being restored about seven weeks after the nation's second-largest magazine distributor abruptly ceased business Feb. 7.

Local book distributor The Islander Group and a Canadian partner this week bought assets including customer order lists and a fleet of about 30 Hawai'i vehicles from defunct Anderson News LLC.

Jeff Swartz, president of Islander Group, said the partnership has assumed the duty of delivering more than 600 magazine titles — from People to Hawaii Fishing News — to retailers statewide.

The arrangement has brought relief to many retailers and magazine publishers that were left in the lurch by Knoxville, Tenn.-based Anderson.

Filo Tu, president and CEO of Blind Vendors Ohana Inc., which operates nine newsstands at Hawai'i airports, said Islander Group resumed deliveries yesterday, repairing a big hole blown in the newsstand business.

"I had hard time sleep for the last month," he said. "Our print material is something that we had to have."

For the California-based publisher of the quarterly magazine Bodyboarder, Islander Group helped continue delivery of the internationally distributed publication in one of its biggest markets.

Eddie Solomon, one of the magazine's owners, said Bodyboarder was fortunate in that the latest issue is arriving in Hawai'i stores only four weeks later than usual.

Islander Group, which is based in Mililani, partnered with the U.S. division of Canada-based book and magazine distribution giant The News Group to launch the Hawai'i magazine distribution service.

Swartz said Islander Group so far has added about 10 employees to its staff of roughly 100, and plans to hire more. It was uncertain how many former Anderson News employees in Hawai'i would be hired.

Retailers now being supplied by Islander Group include Longs Drug Stores, Star Market Ltd., Safeway and many others, though arrangements are still being worked out with some, Swartz said. "Our phone has been ringing fast and furious," he said. "We are taking care of customers from the Kona airport to Waianae Store."

Anderson News had historically handled most wholesale magazine distribution in the state. The company's main national rival, Source Interlink Co. Inc., supplied other local retailers and has picked up some pieces of the business dropped by Anderson News including Foodland Super Market.

A Source Interlink representative did not return calls for comment this week.

Anderson News had been struggling with financial losses for several years and was trying to find a solution to restore its operating profit. Last year, the company reported a net loss of about $20 million on sales of $760 million.

The company told magazine publishers it needed to add a surcharge of 7 cents per copy for distribution if business was to continue after Feb. 1. Major publishers refused and stopped shipping magazines to the distributor, Anderson News previously said in a statement.

Earlier this month, four major publishers forced Anderson News into bankruptcy over unpaid debts. Anderson News in response has sued several publishers in federal court in New York alleging that the publishers colluded to drive Anderson News out of business and monopolize the U.S. wholesale magazine distribution market.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.