If you're the type who takes study breaks at upscale department stores, then you just might be Harcourt General's ideal customer. Harcourt General operates vastly different businesses: educational publishing under the name Harcourt Brace & Co., high-end department scores via The Neiman Marcus Group, Inc., and a management consulting firm. One of the world's largest publishing houses, Harcourt Brace specializes in scientific, technical, and professional books and journals, but publishes children's books and general adult fiction and nonfiction as well. Under the Harcourt Brace umbrella are subsidiaries Holt, Rinehart and Winston, Academic, W.B. Saunders, and the Psychological Corporation (which publishes assessment tests).

The Neiman Marcus Group, of which, until recently, Harcourt General owned a 53 percent stake, targets upper-income shoppers through its 30 Neiman Marcus stores, two Bergdorf Goodman stores, and its NM Direct catalog business. Harcourt General's 53 percent stake in the retailers used to account for two-thirds of its annual revenue, but in October 1999, the company spun off its controlling interest. Harcourt still owns ten percent, or five million shares, which means it sold 21 million shares amongst the company's shareholders. Now the company can concentrate on its growth in the publishing arm. The "echo boom" generation of youngsters provides a fertile market for Harcourt's educational materials.

History 101

Harcourt, Brace & Company began publishing the educational materials for which it would become famous in 1920. In its early years, the company, founded by Columbia University classmates, published such notable works as Main Street by Sinclair Lewis and The Economic Consequences of Peace by economist John Maynard Keynes. Fifty years after its founding, the company added the name Jovanovich to reflect the influence of company president William Jovanovich, who started with Harcourt Brace as a salesman. By that time, Jovanovich had begun to diversify the company's holdings, acquiring a life insurance company, a psychological testing service, Sea World amusement park, and Drake Beam Morin (DBM), a human resources consulting firm. DBM, which started in 1967, boasts 1900 consultants in 166 offices (81 in US; 85 international) in 27 countries. In 1987, Harcourt, Brace & Jovanovich bought the Neiman Marcus Group. In 1991, General Cinemas purchased Harcourt, Brace & Jovanovich, which had been weakened by a hostile takeover attempt a year earlier. Soon after, General Cinemas spun off its movie theater business, renamed itself Harcourt General, and dedicated itself to running the businesses it acquired from Harcourt, Brace & Jovanovich.

Economics 202

In recent years, the publisher has worked to augment its services through acquisitions. In June 1997, Harcourt outbid Sylvan Learning Systems for National Education Corp. (NEC). Harcourt shelled out about $850 million for the multimedia educational program provider (an additional $236 million in acquisition-related costs put a damper on profits that year). Included in the NEC bundle was subsidiary Steck-Vaugh, an educational publishing company whose product line supplements Harcourt's. To diversify its titles, Harcourt purchased medical publisher Mosby Inc. from the Times Mirror Co. for $415 million in 1998.

Computer Science 151

Harcourt is making a name for itself electronically as it strives to attain its goal as the leading broadband learning company. The division Harcourt, Inc. ("Brace" was officially dropped in mid-1999) recently teamed with CNN Interactive and Turner Learning, Inc. as an education partner. As such, Harcourt provides the educational curriculum and assessment materials for the new CNN program that offers news and information to middle and high school students and their educators and parents.