Doing Business : The Worst of Times for British Book Publishing : * Publishers were once a clubby lot, but the paltry economy has turned the trade into a crass and commercial business.

When Deborah Owen arrived here from New York to set up shop as a literary agent more than 20 years ago, the book publishing world still had a fusty Bloomsbury flavor about it.

Publishers were a clubby group, she recalled, centered around Bloomsbury and Bedford squares, with the British Museum library between. They entertained authors, agents and booksellers in nearby Dickensian pubs and restaurants.

Today the business has become much more crass and commercial, hardened by a steady drop in sales ever since 1986.

“Last year we were hit between the eyes,” said the dark-haired, American-born Owen, who is the wife of the Social Democratic member of Parliament, David Owen. “In the cold light of day, we realized we are not a healthy industry. We are floundering and have to try to find a new identity.”

In fact, the book business has been rapidly changing at both the publishing and the retailing level. Many of the traditional British publishing houses have merged or been taken over by American companies even as many small booksellers have been pushed to the wall by the larger chain-store sellers.

In recent years, for instance, the U.S. publisher Random House has taken over Chatto, Bodley Head, Jonathan Cape, and Century. On the other hand, Britain’s Collins has effectively absorbed America’s Harper & Row, and Britain’s Robert Maxwell has bought the American firm Macmillan.

The mergers make sense for publishers who want to broaden their markets for books in English, but as Deborah Owen points out, corporations tend to become bottom line-minded, concentrating on sure-fire blockbuster authors with little concern for budding first novelists.

At the merchandising end, says Jenny Bell, editorial manager of the Bookseller magazine, “a lot of Britain’s smaller booksellers have been hit by tripled rents and competition from expanding chains like W. H. Smith (which sells one in four books in Britain), Dillon’s and Waterstone’s. The independent booksellers are going out of business.”

And the publishers themselves are suffering, like the rest of British business and industry, from an economic recession, deeper than the one from which the United States appears to be recovering.

Estimates of layoffs in publishing firms range up to several thousand employees in across-the-board cuts that include senior editors of long standing. They touch every level of the British industry--the two dozen major houses, 200 or so medium-sized firms, and as many as 3,000 small publishers, each printing only a couple of titles a year.

“The publishing industry is sharing the recession,” says Clive Bradley, head of the Publishers Assn. “This looks like a bad year. High interest rates have hurt, the relatively strong pound sterling hits exports, and public spending is down, which affects books purchased by libraries and schools.”

While the Publishers Assn. says that figures for 1990 and 1991 are not yet compiled, trade sources indicate that book sales may be off as much as 3% compared with 1989. And that’s on top of a nearly 4% drop that year from the 1986 peak.

Other sources contend that creaky managerial practices in the industry are more to blame for its problems than a sales downturn. As Owens puts it, “A lot of managing directors didn’t know how to read a balance sheet.”

Terry Maher, chairman of Pentos, which controls the bookselling chain Hatchard’s & Dillon’s, charges: “There has been very poor management indeed. While retailing standards have improved markedly, a publisher still takes three to four weeks to get a book to a store, when other businesses supply outlets within 72 hours.

“Publishers,” Maher contends, “are using the recession as a convenient excuse for their self-inflicted wounds.”

Customary British bookselling practices like the Net Book Agreement (NBA), which allows publishers to set prices for booksellers, are also under fire. Critics such as Maher argue that the practice restricts book sales by forbidding discounting, particularly by the chains and supermarkets.

Defenders say discounting would be the death of even more small booksellers and that, in the end, publishers would only set their published prices higher so that sellers could “discount” them while enjoying just as large a profit margin as before.

Britain’s 7,500 bookshops are confronted this year with a staggering 60,000 or more titles published--at least 50,000 originals and 10,000 new editions. That’s as many as in the United States, which has four times the population.

As literary editor Nicholas Shakespeare puts it: “The shelf life of a book now averages four weeks. . . . Most enjoy only a rapid flight to second-hand shops, remainder stores and street barrows.”

Adds the Publishers Assn.’s Bradley: “We probably do publish too many books. But which ones don’t you print?”

Some observers like the Bookseller magazine’s Jenny Bell blame the Persian Gulf War for distracting book readers, and the late-winter snowy weather for keeping buyers from bookstores. But the economic recession aside, agent Owen believes there may be more endemic problems in the British publishing business.

Lunching recently in the Soho literary meeting place, L’Escargot, she declared of the British book-publishing scene: “In the old days, it was the publishers who were all-powerful. Now it’s the booksellers. They can call the tune. But we need to develop new techniques in marketing our books.”

Owen, who comes from a publishing family, met her husband in New York, and soon after marrying in 1968, moved to London and set up Deborah Owen Ltd.

She took on ex-Parliament member Jeffrey Archer, then looking for an agent to hawk his first book and, under her tutelage, Archer became a phenomenal bestseller. (He now acts as his own agent.)

Working from her 18th-Century residence in Limehouse, overlooking the Thames River, Owen numbers among her clients Israeli novelist Amos Oz, mystery writer Ellis Peters and best-selling English cookery writer Delia Smith. Soon she will be hawking her husband’s political memoirs.

“When I came to London,” she said, “ marketing was a dirty word. It was a very intensely literary world, and the ideal was to get a review in the Times Literary Supplement. In England, there is more concern among editors in how authors say it--rather than what they say. In America, we are looking for a good story to tell.

“But times move on, and authors move on,” Owen continued. “I had to decide whether to be true to English tradition or myself. I preferred to focus on authors who could tell riveting stories. And who would appeal to an international market. My list of authors, by and large, are able to travel internationally.”

Owen believes that rather than viewing television as an enemy, publishers and booksellers can form a mutually advantageous collaboration, both in marketing and in putting authors and their works into TV shows. “Books and TV should be friends,” she says.

She advocates placing book ads in relevant parts of a newspaper, rather than only in the book review sections--a novel about finance or money, for instance, would be advertised in the business pages.

She would also like to see books sold in public libraries, believing that any upsurge in buying interest ultimately helps booksellers everywhere.

“We in the book business need to gain back our confidence. We’ve got to shift the focus, so that publishing doesn’t concentrate only on the big authors, and a new book is not just a sink-or-swim affair.

“We’ve got to nurture new books and give them a longer life. I’d prefer to see fewer books published, but with longer lives.”