Even before the company filed for bankruptcy, it was no secret that Diamond Comics Distributors had been struggling. With titles shipping late for months, Diamond was ceding ground to competitors like Lunar in the direct market. Even those shifts did not completely alleviate the issues with shipping deadlines across the industry, with Lunar also shipping some books out to comic shops late, according to statements from retailers.

As for Diamond, Chief Sales & Service Officer Chris Powell blamed a combination of factors, from shipping and warehouse congestion to weather-related delays, as reported by Diamond filed for Chapter 11 bankruptcy protection, hoping to sell off some of its business units and reorganize to save the struggling core business.

Diamon has a loan lined up from Chase and a Stalking Horse Bid in place from an of Universal Distribution for Alliance Game Distributors. A stalking horse bid is an initial bid, made by a potential suitor for a bankrupt company, that serves as the starting bid for any future bankruptcy proceedings. The bid places the starting value of Diamond's assets at $39 million.

Why Is Diamond Running So Late in Its Weekly Comic Book Shipments?

Delays Throughout the Supply Chain Are Causing Congestion at Diamond

Diamond recently closed one of its distribution centers. That's bad news, but what's worse is that, after the abrupt closure, Diamond has been forced to "test [changes] with live data and shipments," while trying to minimize its impact on retailers and the market. That this happened during one of the industry's busiest months - December - likely only worsened the existing issues. Comic shops in the Northeast, accustomed to having many of their books shipped from Plattsburgh, NY, are now getting their books from the southeast instead, and the shipping changes have also seemingly resulted in a number of complaints about damaged deliveries.

Lunar, Ingram, and other distributors started to move in on Diamond's territory, opening up the business to meaningful competition for the first time since 1996.

Diamond had a functional monopoly on direct market comics distribution until 2020. When the COVID-19 lockdown began, Diamond - a fairly small, private company - was ill-equipped to deal with the disruption. Lunar, Ingram, and other distributors started to move in on Diamond's territory, opening up the business to meaningful competition for the first time since 1996. Larger publishers have mostly diversified their distribution options, although a number of comic book publishers - reportedly including Titan, Dynamite, and DSTLRY - remain exclusive to Diamond, at least for the time being.

Diamond's Issues Impact the Comics Industry Broadly

Delays and Damaged Books are Driving Customers to Other Vendors

Most American comics have been available digitally on the same day as their newsstand release since 2011, but hardcore comics readers often prefer to own the physical comic book. On the other hand, those same super-fans want to read the comics before they get spoiled online, so delays can be deadly, not just for Diamond, but for retailers as well. Just as too many missed shipments can send a retailer running to Lunar or Penguin Random House, it can also drive consumers to another comic shop or even the internet. Additionally, comics collectors tend to be conscious of comics' condition and reject books damaged in shipment.

Chapter 11 is not the end; Diamond is not yet being forced to liquidate its assets, although it will likely sell off quite a bit during restructuring. But an existential threat to Diamond Comics Distributors is a bad omen for the American comics industry as a whole. For the distributor to be able to pull out of this spiral, it's likely necessary to get its core business - actually distributing comic books on time and in salable condition - back in order.

Source: Bleeding Cool