Scholastic sells over 160 million children's books and 25 million classroom magazines each year - most notably through the Scholastic Book Club. Founded in 1920 as The Scholastic, the nation's first classroom magazine for high-school students, the company's materials are now used in 90% of American classrooms and its Clifford the Big Red Dog, Goosebumps, and Baby Sitter's Club book series have sold over 235 million copies.

More than just books

In addition to publishing, Scholastic also operates book fairs, the nation's largest and oldest scholastic writing and art contest, and the National Teacher of the Year Program. In the late 1990s, Scholastic experienced a downturn caused primarily by a slump in the sales of the Goosebumps books, its best-selling product. Scholastic's stock price was nearly halved, forcing the company to slash 400 jobs, about seven percent of its work force, to fold its magazines Agenda, Superscience Red and Math Power, sell its profitable magazines Home Office Computing and Small Business Computing, and streamline its Jefferson, MO distribution center. Through these moves, Scholastic managed to squeak by with a meager profit of $361,000 for fiscal year 1997. Scholastic learned its lesson - it no longer puts too many eggs in one basket.

Scholastic's recovery

By 1998, the company had successfully implemented a turnaround program that brought the company back to a satisfactory profit level. By branching out into electronic products such as CD-ROMs (made in partnership with Microsoft) and an online service (produced with America Online), Scholastic is hoping gain even more strength. Scholastic is also returning to the instructional curriculum business - which it initially entered in the 1970s, when school enrollments were slumping, and left in the early 1980s, just as the birthrate was rising again. In 1999 the company signed an agreement with HarperCollins; beginning in July 2000 HarperCollins will handle customer service, billing, and credit functions. Also in 1999 the company launched its revamped scholastic.com web site. In May 2000 the company signed an agreement with Yahoo! to provide "Newswire for Kids" on the Yahooligans! Web guide.

Brand-name strength

Through thick and thin, generations of teachers still know and love Scholastic and await the company's new products. Scholastic will rebrand Goosebumps, returning the book to its "scary" roots. The company also has high hopes for new book series Animorphs (about kids who can turn into animals) and Dear America, and its new Scholastic Productions division, which has already produced a lackluster film, The Baby Sitters Club. Scholastic has since stepped up the marketing of its popular, science-oriented The Magic School Bus book series, which is now a TV cartoon series. The Census Bureau has recognized Scholastic's comeback, selecting the firm to conduct its "Census in the Schools" program, meant to increase response to the 2000 Census. The company's Teen Magazine Network has also posted a strong rebound - with more than 8 million readers, it has the highest overall teen readership. For most of 1999 the company had the top seven books in Barnes & Noble's juvenile bestseller list. Boosted by the success of the Harry Potter books, the company reported record revenues and improved earnings for fiscal 1999.

Grolier acquisition

In June 2000 Scholastic announced that it had completed its acquisition of Grolier Inc. from French publishing giant Lagardere S.C.A for $400 million. The acquisition strengthened Scholastic's position as the world's largest publisher and distributor of children's books, with combined revenues of $1.8 billion. Grolier specializes in direct-to-home children's book distribution as well as children's reference products (including Encyclopedia Americana) sold primarily to U.S. school libraries. The company also publishes Orchard Books, Children's Press, and Franklin Watts imprints. Scholastic expects the acquisition to increase Scholastic's operating income by 30 percent in the next few years.

Scholastic International