Handling Rolling Shutdowns Going Forward, Plans for Free Comic Book Day
Posted by Milton Griepp on May 21, 2020 @ 3:28 am CT
In Part 4 of this five-part interview, below, we talk about what will happen if there’s rolling chaos, with regional shutdowns and openings across the country, and plans for Free Comic Book Day.
In Part 1, we asked about key decisions made at the end of March: to shut down most functions at Diamond and Alliance, and to delay payments to vendors. In Part 2, we talked about the surprising impact on Diamond’s relationship with DC, its second largest supplier. In Part 3, we talked about how GFE companies will handle the product caught in the pipeline between order and shipment during the shutdown, and Diamond’s new competitive landscape. And in Part 5, we talked about the reorganization of Geppi’s companies into Geppi Family Enterprises, his plans for the future of his companies, and for his ownership of them.
ICv2: Over the next few months, and maybe longer than a few months, we're probably looking at a time where the situation's not going to be uniform all over the country. There's going to be places that have outbreaks that require more social distancing. There's going to be other places that maybe have passed that stage. There may be places that open up and then have to shut down again. That may apply to any of your Diamond, Diamond Book, or Alliance warehouses. It may also apply to the retailers you sell to, it may apply to the printers. How are you going to cope with this rolling chaos that we may be looking at for some period of time here?
Steve Geppi: Not to be overly simplistic, it's going to be a case‑by‑case basis. There have been times in the past where there have been hurricanes in a certain region, where certain areas of the country have been restricted more so than the rest of the country. You couldn't shut the rest of the country down for it.
That's why this time it was the majority versus a minority. When it's a minority, it's a little bit easier to deal with, but it gives you a precedent for how to deal with it, if California opens slower. (I'm hearing from [Dark Horse CEO] Mike Richardson. He's even more pessimistic about Oregon. He thinks they'll be the last to open. I'm not as privy to that particular state's situation. Maybe it's more borne of politics. There's a lot of that that plays into this.) We're going to be more proactive than we've ever been in literally talking to the retailers, if not individually, on a weekly basis.
The surveys we've done have not just been about, "How many do you want?" or when you're going to open. It's, "Can you pay for it? How much can you pay of your shipment?" a variety of questions that I don't think are going to be stopped now. They're going to be progressive.
We hope we'll get better answers as we go along because now, a retailer will be able to talk about his actual experience as opposed to his projected experience. "I just opened this weekend, and you know what? I thought I was only going to do 30 percent and I'm doing 45 percent. You know, next week, I thought I was only going to..."
As they evolve, they've got to keep us informed. We've got to keep the publisher informed. Of course, the publisher is going to need to know in order to keep the printer informed. It's not an easy question, not an easy answer, but we will find out as we go on. I think we're equipped for it.
Internally, we're doing everything we can, first and foremost, to be safe for our employees. We want our employees to feel comfortable. I've read horror stories up in North Dakota about that Smithfield ham plant, 600 employees and 354 of them got the virus. They thought they were practicing social distancing.
Now, you're hearing things that say, "Staying at home is more dangerous than going out." It's such a crazy world. You don't know what to believe. Some of it's political. Some of it's contradiction of science. Some of it's just flat‑out bullshit.
It is going to be difficult. We're going to just have to roll with the punches. The good news is we are starting, and we will know more for the 5/27 group than we knew for the 5/20 group. We're going to know more for the 6/3 group than we do for the 5/27.
Hopefully, that knowledge will be growing in a positive direction. If we screw up and we find out something that we thought was one way and it's another, we're going to try to rapidly correct it so that, as we go forward, the mistakes or the miscalculations will be minimized.
Is Plattsburgh open?
Yes, Plattsburgh is going to ship, too.
For technical purposes, on the 5/20 group, to give you a little background to show you how crazy this was, when we were contemplating shipping the 4/1 group before we ultimately decided not to, the 4/1 group had already shipped. It was in Olive Branch and it was in Plattsburgh.
When we thought we could ship the 4/1 group, we also thought we couldn't ship it out of Plattsburgh. Plattsburgh may even be more than half now, more than Olive Branch. So we had a truck go out the door to bring those books down to Olive Branch. This is where it gets complicated.
In the interim, the mayor of Plattsburgh changed our plans, so we had to turn the truck around and go back to Plattsburgh. A few days later, the governor made it so we thought we could again, so we had to resend the trucks. What I'm getting at is the whole 4/1 group is in Olive Branch, whereas the 4/8 group is at the printer.
We can still send the 4/8 group to Plattsburgh and Olive Branch. The 4/1 group, we are going to ship everybody out of Olive Branch.
What we were getting at, though, was you made a decision, "One of my warehouses is closed. I need to shut them all down. A certain percentage of retailers is closed. I need to shut everything down." Where is that threshold for the future? Do you foresee a possible situation going forward where a big enough percentage of either your capacity or retail capacity is shut down that you have to shut the whole thing down again?
That's going to be the $64,000 question. First of all, as you and I hope and everybody else in the world hopes, that doesn’t become an issue, that once we open, we're open. I see a propensity towards that mentality across the country and across the world. We'll have to cross that bridge when we come to it.
I do anticipate that we are flexible enough that if something like that does happen and it's regionalized, because we have two big locations that are capable of doing all versus the portion they do now (whether it means everything is shipped out of Olive Branch or, God forbid, Mississippi suddenly shuts down and New York can), we ship it all out of there. Given that historically, the biggest part of our weekly shipment is the big four or five publishers, that's going to determine what we do. Right now, I don't know how many states have a reopening program. It's a high number though. You know what it is?
How many states have a reopening program? It's all over the map, and some of them are saying, "Well, we're going to make incremental changes. We'll tell you every week what kind of stores can open and what kinds have to stay closed."
The first time I was on Dan Shahin's show with Phil Boyle and all, shortly thereafter, Phil told me (he's in Florida) eight of his nine stores were opening that Friday. They will now have been open a week, a week ago this past Friday. He's been open 9 or 10 days.
I actually had Shawn Hamrick, our guy that runs the plant of the Olive Branch warehouse, just freaking call the government and wait as long as it takes to get through to say, "Are we cool?"
You've got to remember, where we are, in Olive Branch, around the corner from us is UPS, FedEx, Amazon, all these monster warehouses that make ours look small at 600,000 square feet.
I've got a hunch in DeSoto County, which also actually stretches into Tennessee and hits Memphis, believe it or not… It's like the same county, two states. I've got to believe that because there were so many big shippers, and ones like Amazon and UPS that are considered essential, that it was hard for them to bifurcate and say they can and we can't.
That's what gave us the ability that we're even currently doing, of shipping reorders. The inventory is in Olive Branch for all the graphic novels and the like. While the stores have been shut down and while Diamond has been shut down, Olive Branch has been operating with a skeleton crew, uninterrupted through now, to ship reorders and backlist and things of that nature.
We looked at the Mississippi shutdown order. It specifically excludes "distribution" from the shutdown order and says that distribution is an essential business. There's a lot of distribution in that area around Memphis.
We've been flat out told we're OK. We're part of a supply chain that's necessary.
I was saying though on the consumer level ‑‑ you heard me say this before ‑‑ that even if your store opens and you've got curbside service and you're the publisher saying, "I've got this many stores open. I know I got curbside service," in anticipating the bottom, you have to remember the customer has still got to come in unless they get it by mail. The customer still might have trepidation about going out of the house. They might be worried about getting in trouble for going out of the house because they can't tell the police or whoever's the custodian of all of this that they are going to get their comic books and not medicine and food. It's really a complicated mess.
That's why I'm trying to take the positive attitude on the business side. If it is a new world, it's a new world in general, not just the comic industry. I'm going to try to position our company to be aware of what other opportunities that come up. There may be things that came up before that weren't doable, but now they are.
Think about it, what company got hurt more than Disney. They own ESPN. They're in the sports business. There's no sports. There's only so many times you can watch the replays. They're in the cruise business. There's no cruises. They're in the theme park business. There's no theme park. They're in the move business. There's no theaters. They're in the comic business. If it weren't for Disney+, which is a recent initiative of theirs… They laid off 100,000 people. When you're talking to somebody who’s "above you," they're your vendor, they're somebody in a bigger place. There's people that are talking to us that forget that we now know that they've pretty much got worse problems than we do, and that it might be not as rosy in their world, not that we want it to be. If all of sudden, somebody's talking to me from Time Warner or AT&T or from Disney in an authoritative fashion, I may read tomorrow they're out of business.
We're all caught in the same boat, is what I'm emphasizing. Let's say on an initiative we tried to get Disney to do before, or somebody else, they might be a little more open‑minded now because they're all trying to find revenue. We have to keep that in mind. We're not alone.
As we understand it, the comic publishers have already printed their Free Comic Book Day comics. You've got them. Obviously, Free Comic Book Day didn't happen. That's one more hardship and difficulty for the publishers and for everybody in the business. What are you hoping to be able to do with Free Comic Book Day?
We definitely want to do it. We're going to probably do it in the fall. We're canvassing that idea. I have my own ideas on that. I don't think you want to do it Thanksgiving because you’ve already got Black Friday.
Maybe there's a period. I was thinking, just for what it's worth… This is meaningless, internally, they don't even know this. I was thinking about Labor Day, when kids go back to school (hopefully), and there's theoretically a projected lull period in the comic stores, that'd be a good time to give them a big day.
We do have the comics. I know there's a couple isolated issues where somebody… Eric Stephenson from Image had a concern about one they did that was tied to a release, so we're having to do some modifications so that we don't put the chicken out before the egg. The design of his free comic, as I understand it (I don't even know the title) was to be a teaser for the release. If the release is coming out before the teaser, that's causing a little bit of an issue there.
Isn't that true of everybody? They're all promoting stuff that was planned to come out after…
That's one I specifically know of. I don't know about the other ones. They'll probably get addressed individually. Free Comic Book Day as an entity or as an event obviously passed already. It's already way past May 1st, so now we're going to just find the right date on the calendar. If there are contradictions in the story lines, I guess they'll have to either rethink that or redo that actually, for that matter. I don't know. We're going to do whatever the publisher wants in their individual cases. It's their promotion, so to speak.
Click here for Part 5.