After months of red flags, the comic book industry is reeling from the announcement that Diamond Comic Distributors had filed for Chapter 11 bankruptcy relief. While no longer the only distributor, Diamond is and has been the biggest distributor in the comics direct market since the 1990s. If the company can recover, these challenges might lead to a healthier comics industry, but it could be catastrophic for comic book retailers.

Diamond, which was virtually the sole distributor of comics in the U.S. market for over twenty years, has been struggling for the last five years, and in late 2024, it started missing shipping dates. Given that digital comics are available on the same day as print titles, the delays hurt not just Diamond's sales, but comics retailers as well, with hardcore fans turning to the internet to read their comics to avoid being spoiled.

In December 2024, Diamond closed a distribution center, leading to further delays and an uptick in retailer complaints about damaged books. In mid-January 2025, Diamond filed for bankruptcy, saying the company would be restructured.

What Are the Most Likely Scenarios for the Comic Book Industry After Diamond's Bankruptcy?

A Lot of Possibilities Exist, But There Are Two Most Likely Options

In the best-case scenario, the industry emerges a lot more stable now that the long-standing distribution monopoly has been truly broken up. If Diamond can successfully restructure and come out of Chapter 11 bankruptcy, not only would the company be stronger, but it's likely that the industry as a whole would benefit from the increased competition that has been seen in the last few years. Diamond's monopoly is already broken, so the biggest question is what will happen to the company and, importantly, its inventory. Unfortunately, there's also another possible outcome that seems frighteningly plausible.

"This could be bloody," one veteran comics retailer anonymously told Screen Rant.

If Diamond can't exit Chapter 11 and has to move to Chapter 7 bankruptcy, it would be forced to liquidate its assets. While some of that stock would be returned to publishers, such a liquidation would likely mean hundreds of thousands of comics and graphic novels being sent to Ollie's and Barnes & Noble at deep discounts, potentially harming retailers who rely on trade collections to break even. "This could be bloody," one veteran comics retailer anonymously told Screen Rant. "Like, 'all stores undercut with unsold Diamond inventory' bloody." He added, "I am rooting for Diamond for a litany of reasons."

Has a Comic Book Industry Disruption Like This Ever Happened Before?

The Comics Market Hasn't Had a Shakeup This Big in Decades

During the comics speculation boom of the '90s, a number of comics distributors were in the direct market. After the bubble burst in 1995, many distributors closed, and Diamond acquired the rest, creating a virtual monopoly. That monopoly held up, more or less, until 2020. When the COVID-19 pandemic lockdowns began, Diamond - a fairly small operation in spite of its outsized role in comics - closed its doors, leaving comics in the lurch. Larger distributors rushed in to save the day, but when the lockdown ended, they didn't leave the industry behind.

One comparison would be the way the manga market was ravaged after Media Play's collapse in 2010. Media Play, a division of Musicland, was a trailblazer in the U.S. manga and anime market. While it was instrumental in introducing young Americans to the medium, the company also held an enormous amount of manga inventory at the time of its closure. At the time, publishers panicked, worrying that the stock would be sold at a discount, undermining demand for full-price merchandise. Unfortunately, their other option was to take returns and refund their biggest American buyer.

Diamond Comics Distributors to Restructure Following Bankruptcy Filing

Toys, Grading, and Other Businesses Could Be Sold Off

In an email to retailers, Diamond president Chuck Parker said that the restructuring will "likely include the sale of key assets," with Universal Distribution interested in taking on Alliance Game Distributors. Diamond UK, Diamond Select Toys, and Collectible Grading Authority are all reportedly on the table, according to Businesswire, who first reported the bankruptcy. The company should be able to continue operating thanks to $41 million in debtor-in-possession (DIP) financing from JPMorgan Chase, which will be used to meet current and future obligations during the restructuring.

By all appearances, Diamond's plan is to focus its energies on the comics market, shoring up its core business of comics distribution and shedding some of the ancillary businesses it has generated and acquired along the way. Obviously, without the monopoly it previously held in the market, that core business is facing more competition than anytime in recent memory. Still, Diamond has strong relationships with retailers and publishers, including a number of comics companies, like the still-growing DSTLRY, with whom Diamond still has exclusive distribution deals.

What Will Comics Retailers Do if Diamond Fails?

Sales Have Been Impacted Since Fall By Delays

Some comics retailers are already moving as many of their orders as possible away from Diamond, though Lunar, its biggest competitor in the direct market, has also had its share of recent shipping delays. The result was a sluggish December for many retailers, who rely on new releases to get readers in the door. Of course, the graphic novels and collected editions would be most impacted if Diamond was unable to pull out of its slump. Retailers are certainly hoping for the best for Diamond, but it's hardly surprising that so many have expressed frustration, outrage, or a desire to change distributors entirely.

Given the potentially damaging outcomes they face if Diamond Comics Distributors were to fail, it's very likely that retailers will continue to the distributor.

Retailers have a number of options on the table for comics wholesale now, and there's also a replacement for Diamond's place in the book market. Ingram, one of the biggest media distributors in North America, has entered into the direct market. Now, comic shops can order product like movie tie-in books and other non-comics titles from Ingram and get them delivered at the same time as Barnes & Noble and Amazon. Of course, given the potentially damaging outcomes they face if Diamond Comics Distributors were to fail, it's very likely that retailers will continue to the distributor, at least in the short term.

Source: Businesswire