Can A Comic Book Collector Put The Magic Back In Marvel?

Distributor Steve Geppi is using his powers to help Marvel

Who will save Marvel Entertainment Group? Instead of turning to Spider-Man or the X-Men, the ailing comic-book giant has enlisted a former postman with an eighth-grade education. But as they say in the comics, Stephen A. Geppi is no ordinary ex-postman.

Geppi, an unpaid adviser to Marvel since investor Carl C. Icahn took control in June, knows his comic books. The company he heads, Diamond Comic Distributors Inc., is the largest comic-book distributor in the U.S., and Geppi personally owns one of the country's biggest collections of rare comics. Marvel, mired in Chapter 11 since December, has turned to him for his thoughts on everything from new titles to comic-character collectibles. Says Joseph Calamari, president of Marvel, which is still the No.1 comics publisher: "Steve does a lot more than deliver comic books."

Geppi, 47, who also trades and collects old movie posters and animated-cartoon art, retains his boyish zest for comics. Growing up in Baltimore's Little Italy, he had a part-time job sorting them at a local store. In 1972, while working as a letter carrier, he picked up a Batman his young nephew was reading. "I realized I had never lost interest in comics," he says. "It was just that people said you were too old to read them." His youthful passion rekindled, the round-faced, fast-talking Geppi went on to open four comic-book retail stores.

GOOD TIMING. In the early 1980s, he moved into delivery by founding Diamond. The comic-book market was soaring. Aside from kids, nostalgic baby boomers were buying and trading vintage editions. Geppi bought the accounts of a distributor who wanted to go into comic-book retailing, paying him with--what else--comics. Since then, he has gobbled up many smaller outfits.

Today, Diamond dominates the $500 million comics-distribution industry. Geppi, who owns 100% of the Timonium (Md.) company, projects that revenues will hit $220 million this year. Industry sources estimate that his net margins run around 5% to 6%, giving him earnings of roughly $12 million. Diamond's success is a testament to both Geppi's love of the art form and his U.S. Postal Service background. As a comics fan and retailer, Geppi won favor from publishers by giving free advice on what was selling and why. And as a USPS alumnus, he understood the benefit of a national distribution network able to ship on the ground or the air interchangeably. Before Geppi, most comics distributors were regional outfits that depended on either air freight or truckers to move their books from the printers. One glitch meant delays.

Geppi constructed an elaborate--and flexible--system of air and truck shippers to whisk books to retail racks nationwide. If one carrier ran into trouble, another leaped in to haul the colorful cargo. Timely delivery was a big hit with avid readers, who wait eagerly for their comics to arrive at the store every Wednesday. Publishers liked it, too. Says Paul Levitz, executive vice-president at No.2 DC Comics Inc., home of Superman and Batman: "He does an incredible job moving the product."

Diamond's advance hasn't been trouble-free. Some store owners complain that his near-monopoly has let him hike prices. And in the early '90s, publishers pumped out too many titles, leading to a glut that damaged the entire industry, particularly Marvel. Geppi got hurt when Marvel, looking to save money, decided in 1993 to distribute its own books. Overnight, Geppi lost 30% of his business. He scrambled to make up the loss via DC. By dangling attractive discounts, he expanded from handling half of its deliveries to all of them. Geppi also branched into comics-related trading cards, video games, and collectibles.

WELCOME BACK. Meanwhile, things got worse at Marvel, then owned by financier Ronald O. Perelman. Marvel annoyed readers by continuing story lines from one book to another to spur sales. So to follow one issue's Spider-Man plot, say, readers would have to buy the next X-Men. Leading artists fled to start competing companies, an exodus that hurt Marvel's quality. This spring, before Icahn took over Marvel in bankruptcy court, Perelman's team brought Diamond back, giving Geppi sweet vindication.

Now, as an adviser to Marvel, Geppi is pushing the company to bring out new characters and freshen its mix. Marvel had pared its 200-title list to 45. Geppi feels that's going too far. And he thinks Marvel should use its clout to get special rates from printing companies for new titles, which tend to lose money. Although it's too early to tell what the impact of his counsel will be, there's little doubt that Marvel values his expertise. Geppi's free advice is hardly selfless: A robust Marvel will boost his business.

Geppi has never strayed far from his childhood hobby. Today, he keeps boxes of old comics beside his desk to dip into for a break. "When I was a little boy, these were my friends," says Geppi. "I get the warm fuzzies reading Lulu and Tubby." Now that his hobby has made him rich, Geppi can indulge his childhood dreams. He is a part-owner of the Baltimore Orioles, with author Tom Clancy, among others. But most important, he can have any comic book he wants. When he was nine, he had a chance to buy Action Comics No.1 from 1938, which introduced Superman. At $5, it was too pricey. Last year, he paid $62,100 for it.

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