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How Lunar's Christine Merkler Found Out About The Diamond Bankruptcy

How Lunar Distribution's Christine Merkler found out about the Diamond Comic Distribution Chapter 11 bankruptcy a year ago #diamondcomics

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Article Summary

  • Christine Merkler of Lunar recounts discovering Diamond Comic Distributors' Chapter 11 bankruptcy
  • Lunar faced rapid staff expansion and urgent warehouse upgrades amid the fallout from Diamond's collapse
  • Sudden shifts forced Lunar to onboard new publishers quickly, changing long-held business processes
  • Consignment chaos and industry uncertainty led to tough decisions for Lunar and the comics distribution world

Christine Merkler co-owns one of the largest comic book-focused distributors in the USA, Lunar Distribution, and the world's largest comic book store, DCBS. She and her partner, Cameron Merkler, have had quite the year, which began when Diamond Comic Distributors announced their Chapter 11 bankruptcy. Which left Christine's jaw dropped, but not for the reason you might expect. As she talked to David Harper of Sketchd on the Off Panel Podcast… as well as to ICV2.

"I was in a dentist chair the day it happened, and that's a perfect place for it, right? My phone keeps buzzing, and I always have it on silent, but it keeps buzzing. And I thought that's really weird. And then I look at my, you know, my watch, and Cameron's calling me. And you know, Cameron lives in Memphis. I live in New Haven, where the warehouse is. And I was like, "Why  does he keep calling me?" And I said, "Do you mind if I take I asked her if do you mind if I take this call?" She was like, "Sure, no problem." And I answer the phone. He goes, "Diamond filed chapter 11." And I go, "Are you f-cking kidding me?" He's like, "No, Christina, I'm not." And I said, "Oh." And I just said, "Holy shit." And um I said, "Okay, I'm at the dentist. I got to call you back when I get out." The dental hygienist was like, "Uh, trouble at work?" I said, "Yeah, it's trouble." And that's how my year started. I actually went into the office that day, and it was chaos. I had to pull all my management in, and we've got to figure it out. By the time I got in, I had 20 emails from people asking for distribution. And you know, we were still pretty full from taking on Image's inventory. They have a really large backlist, and we knew that we needed to expand. So that's what we were in the process of figuring out, but this just didn't give us the opportunity to do it as quickly as we wanted to."

How Lunar's Christine Merkler Found Out About The Diamond Bankruptcy
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There was a rush for Diamond-only publishers to find someone, anyone, who would take them on, as they suddenly felt very nervous about Diamond being their only distributor. And Penguin Random House were only taking on five of the bigger publishers. So what about everyone else?

"There are so many publishers that just were, like, what are we going to do? Diamond's the only thing we've had, and how are we going to stay afloat? And we all know it turned into a soap opera; no one could have written this stuff the way that it kind of all went down. I couldn't be like the person who'd be like, "Yeah, let's go. Come on in." You know, because it just wasn't viable. We were still building an inventory team, and we were already growing, and we were very specific about who we hired. We were only taking referrals at the time, so we weren't just going to Indeed and getting anyone. And that changed everything. So then you kind of have this forced hiring situation, which is never good. You never want to hire people just because you have to get bodies in the building. Because we have a very specific process and we only bring a certain number of new people, they get trained, and there's a whole process that we had to throw out the window… We had to double our staff. I think we had 68 warehouse workers in January, and we have 104/110 now, just for Lunar. So, the entire Lunar team was probably at 75, and we're at 160 now."

Sometimes it's about the space as well as the people.

"The biggest part of it was the moment we knew that we had had an auxiliary warehouse that was like 20,000 square ft that was tapped out, and we were like, okay, now we have to find a bigger warehouse. It's 52,000 square ft, about 20 minutes away. It's a brand new building, which was great. But then you have to put in hundreds of thousands of dollars in racking just to store things, and it's just like all of the money that you had earmarked for all these other things just gets completely thrown to the wayside, and you just have to figure it out. Um, which we did… but we still had to wait 12 weeks for steel racking to come
in."

And it wasn't just the employees they had to bring on at speed.

"And then we had to onboard some publishers pretty quickly, and we had to make decisions, and that is never easy. It's not a popularity contest. 'I saw that DCBS and Instock Trades sell a significant number of your books', and so generally speaking, they have a good idea of what the market is, and so if I took the meeting, that's because I saw them as a viable publisher for the rest of the retail market."

Additionally, there were the experiences that some of those publishers had with consigned stock, millions of dollars' worth of which Diamond Comic Distributors Inc., the debtors in the Chapter 11 bankruptcy case, claimed as their own to sell and pay off debts to banks and lawyers. And of which Sparkle Pop, the purchasers of the Diamond business had started to sell.

"We had to start wholesaling this stuff, which we weren't doing for everything. That's another 'great' thing that happened. Diamond ruined consignment for everybody, or the misrepresentation of what they were using as consignment. So there are a lot of people who we were 'look, this is how we normally do it', and they're like 'we're not going to do that anymore. We don't feel comfortable. So you're going to have to purchase it from us,' and that creates restrictions on finding your ceiling, much as a retailer does. Because you only have so much capital to work with."

The speed of change causes issues across the line, as well as a significant sense of responsibility towards the entire comic book industry.

"We had planned to add wholesale, you know, add Scholastic and other options, and we wanted to add more publishers. I mean, we still want to add more manga publishers because we know that's like a hole we have. We just wanted to do more research on it and make sure we got it just right. But, when it speeds it up, it creates hiccups within your own normal workflows and processes that you don't like. We're perfectionists when it comes to packaging and getting things right, and always wanting to make sure it's right. Which is impossible, by the way, when you have a hundred human beings in the building, right? It's not possible to be perfect. We're always striving towards it. We're never going to reach it, but that's always the goal. And when you throw a bunch of humans in that you weren't ready for, and it is not a part of your normal process, it screws some stuff up. And we understand that, but we had to do it. like it was like, you know, you either do it or you don't, and then you don't take on those publishers, and then they go out of business. There was this feeling that if we didn't take on as many as we possibly could to our very limit, people would be going out of business. Um, and we still, you know, there's still 50 publishers that want to come on that I just can't take on…. I can't take a hundred publishers on, though, that don't aggregate to make sense, right? I'd love to be able to do it. just doesn't make financial sense to put some people on a line when we get orders for 93 books out of 2500 retail accounts."

And she laid the situation out with more specifics for ICV2.

"When it comes down to it, it is much easier to distribute a cover that sold 5,000 than it is a cover that sold 500.  The capacity isn't necessarily capacity‑driven, as actual square footage in the warehouse.  It is, how many SKUs do we have to pick in a week?  That is something that I think created the downfall of Diamond (whatever you want to call it): the inability to be as profitable as you can be, because it's a losing game. [laughs] … The thing is, I'm sure for years, Marvel, DC, and Image were subsidizing a lot of those publishers' ability to be with Diamond.  It's important to, what's the word I want to use?  [laughs] It's important to make sure that what the retailers are being provided is what's best for them. I'm not saying that we're gatekeepers, but there's going to be a point where some publishers are going to have to make the decision to either go direct with customers or find a way to directly distribute."

And they did find a way to run some aggregation policies as well, from February 2025…

"Massive Publishing came on. Michael called me before they made the announcement. He said, "I have this idea that I'd like to run by you.  I know that you can't take all these small publishers on.  What do you think, if we did just a massive indie imprint? We would aggregate all that data, we would take care of all of that." I said, "I like it.  Yeah.  I don't have the bandwidth now to take submissions and do all of these things.  I need to make sure that we're taking on all the right publishers and doing all of the things we need to do that people need and know.  We own DCBS.  We know who the top 25 publishers are.  We just don't have the bandwidth to do that."
He said, "Let me do that."  I said, "I'm happy that you're willing to do that." The other thing I said was there needs to be a level of quality that you're expecting, a level of consistency and accountability in what they're doing.  Because they're going to have to follow the same policies that we've created in things that went by the wayside with Diamond, where they would let things be a year late and not cancel them. It's not fair to the retailer to have that hanging over their head knowing that one day it could come out and they don't even, they can't even sell it anymore.  We have very clear policies in place with our publishers about those types of things."

Many difficult choices have been made and continue to be made… but there are also upsides. More to come… including 2026. But first, here's a look back. You can use these Diamond tabs to keep up with the latest on Bleeding Cool. Here's a timeline if you want to catch up…

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Rich JohnstonAbout Rich Johnston

Founder of Bleeding Cool. The longest-serving digital news reporter in the world, since 1992. Author of comic books The Flying Friar, Holed Up, The Avengefuls, Doctor Who: Room With A Deja Vu, The Many Murders Of Miss Cranbourne and Chase Variant. Lives in South-West London, works from The Union Club on Greek Street, shops at Gosh, Piranha and Forbidden Planet. Father of two daughters, Amazon associate, political cartoonist.
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