Interview; Gail warning

John Walsh faces the full force of `the most powerful figure in British publishing'

The first indication Gail Rebuck had that something was afoot was when her boss, Alberto Vitale, called her from New York, inviting her to dinner on Friday 20 March and asking her not to tell anyone. This is the kind of invitation that, corporate-wise, the spider traditionally gives the fly, shortly before the fly departs for Palookaville with a large cheque in its pocket. Even "the most powerful figure in British publishing", as she is often and accurately called, might raise an eyebrow at the spectacle of Mr Vitale heading across the Atlantic to schmooze with her over the glazed duck breast. "I said, `Alberto, what's it about?'" recalls Rebuck, "and he said, `Gail, make sure you realise I'm inviting you to dinner, not breakfast'." This, it turns out, is a form of shorthand meaning, "You aren't going to be fired - not just yet, anyway."

On Friday, she went to the office in the morning and at noon drove to Sussex University (her alma mater) to join the 150-strong "Court" that sits in session once a year, in electing a new vice-chancellor. After lunch, she drove back to the office, went home to see her children and met Vitale at Claridges for dinner. "There was a dinner dance going on, which was a bit unfortunate, but I said, `OK, come on, what's happening?' and he told me." And to the strains of "My Heart Will Go On", Vitale told Rebuck that Random House, the company of which she has been chairman and chief executive for six years, the largest publishing conglomerate in the United Kingdom, had been sold lock, stock and barrel to the German media uber-corporation Bertelsmann for an undisclosed sum.

The exigencies of British publishing hold a curious fascination for the nation's media commentators, as if the combination of books and money, high culture and low commerce, were an unstable compound destined to explode. Random House is the umbrella organisation that oversees the fortunes of 25 key British imprints, from the blue-chip Jonathan Cape (full of Tom Maschler's fiction thoroughbreds, such as Martin Amis, Julian Barnes and Ian McEwan) to the flashily commercial Ebury Press (which publishes The River Cafe Cook Book). Random House's history is littered with takeovers and reverse takeovers, mergers, acquisitions, rows and dramatic exits. It has also weathered a lot of bitching about how the soul of British publishing is being compromised by the rise of American-style conglomerates, destroying the, you know, delightful quirkiness of the gentleman-amateur publisher and laying a dull, homogenising hand on the richness of modern writing. Ms Rebuck has, in a sense, been the custodian of a significant slice of the nation's culture since 1991. It's no wonder the Bertelsmann news hit the front pages last week.

"Of course it was a shock," says Rebuck, her enormous brown eyes radiating a genuine hurt, "as were the press reports which said, `Random House took over Reed last year, and now it's their turn to be taken over'." (The Reed Group, owner of the starry publishing imprints Heinemann, Secker and Methuen, was offered for sale in 1996 and suffered the Death of a Thousand Cuts - hivings-off, management buy-outs, asset-stripping - until it was put out of its misery and bought by Random House for the chicken- feed sum of pounds 18m.) "Even my eight-year-old daughter Grace said to me the other day, `Well, Mummy, now you know how it feels.' And I said, `Yeah, I do.' But I can't help thinking it could all have been a lot worse. Would we have felt better if we'd been a public company, hearing it announced that we were on the block to be sold? Would we have enjoyed months and months of speculation about who might buy us? How much would it have unsettled our publishers and our authors?"

It is characteristic of Gail Rebuck to put the best face on things. In the volatile world of publishing, she is a notable realist and boardroom infighter. But give her a crisis to deal with and she'll sound as positive as Rebecca from Sunnybrook Farm. She's good at damage limitation. I went to see her within four days of a major cataclysm in her professional life, my head full of snide assumptions about her future and her company's. By the time I got there, she'd anticipated them all.

The newspapers have been wailing, I said, about the flower of British publishing being taken over by the Krauts, just like the British car industry. "Ridiculous," she said. "Don't they realise Random House is part of an American company, Random House Inc? And you could argue that the Bertelsmann takeover is a great improvement. Peter Ackroyd told me the other day he saw it as bringing British culture back to Europe."

Why should a conglomerate like Bertelsmann wish to swallow a conglomerate like Random House? Wasn't it like watching one dinosaur uncomfortably devouring another? A sudden froideur set Ms Rebuck's handsome features in permafrost. "I would absolutely dispute that we're anything like a dinosaur. We're the most dynamic publishing company in the UK. We were voted Publisher of the Year. We've got..." Actually, I said, it was the size, the unfeasible bagginess of the operation that sounded unworkable. "We may be large," said Ms Rebuck, sounding like Kate Winslet, "but we're able to be both large and small at the same time. When you write a book, you want it in every bookshop at the same time, in vast quantities, preferably in the window, well marketed. We can do all that because we have the resources of a huge corporation. When you're writing a book, you want a close relationship with your editor, publisher, publicist, and you want them to remain the same group of people, who are there for you through the difficult process of writing. Then you want massive attention when it's published, and, ideally, the odd phone call after it's published, before you write the next one. So you can combine the personal touch and the machine."

Bertelsmann already owns Transworld, the hugely successful multi-imprint publisher of John Grisham, Jilly Cooper and Kate Atkinson. Wasn't it inevitable that they'd sooner or later have to share a sales force, a marketing department? "No, because it would just be too big. We aren't going to reduce the number of books we publish, and neither is Transworld. We're both fantastically successful. So why diminish either side? I hate this knee-jerk reaction that says such-and-such a thing always happens. It won't. It's business as usual."

OK, OK. But a genuine problem rears its head. Traditionally, publishers who are alerted to the existence of a hot new talent bid against each other for the rights to publish the work at an "auction" conducted by the writer's agent. The 25 imprints under the Random House stewardship are expressly forbidden to bid against each other for books, since it pushes the price up artificially. But won't the competition between Random House and Transworld be blunted by their new relationship? Will Bertelsmann, their new joint boss, forbid them to bid against each other for the titles they want? "Nobody has said to me - not yet anyway - You Will Not Bid Against Transworld in the UK. But if they do, we have a tradition of fierce internal competition at Random House. We have ferocious debates among ourselves about which imprint should have which book - far more fierce, I assure you, than anything engendered by an outside agent - and there's generally one person who's the most passionate advocate of a book,who will simply die if they're not able to publish it."

Why did the Newhouse family, owners of the Random House empire, want to sell? Was it because the company was under-performing? "As far as I know," said the UK chief executive, disingenuously, "Random House US has always been profitable. But it's been a tough environment in the past couple of years. The market's declining. The returns to bookshops [ie, of books on a sale-or-return basis] have been averaging 30 per cent, which means in some places it's 50 or 60 per cent. But the reason they sold is more to do with Si Newhouse being 70. In the Newhouse family, it's traditional for family members to take over the operating businesses, and there wasn't an obvious person to get the publishing end."

Coincidentally, Ms Rebuck herself turned down the chance to inherit her father's company on his retirement - but getting details of her family circumstances is like extracting teeth. Partly this is due to the carapace of boardroom dignity that she carries about with her, and partly from a natural gravity of demeanour that goes with her severe Paul Costelloe suit in memorial-service black. You would no more assault Ms Rebuck with impertinent personal enquiries than you would serenade her on the banjo. She disgorges tiny bits of information under duress, eg: Where did you grow up? "London." Where in London? "[Silence...] Central London." Whereabouts in ...? "Near Paddington. I was a very urban child." What did your father do? "My father retired." What did he do? "He did have his own business which he ... [long silence] ... doesn't have any more." Patient strip-mining uncovers the fact that her father was a Latvian Jew in the London rag trade, her mother was Dutch-Jewish and the family name derives from Rybak, rather than from (as you'd assume) some by-blow of the Reebok trainers empire. She went to the Lycee school, where she was the tallest girl in her co- ed class. "Dances were a problem," she recalls. "There was only one boy tall enough to dance with me, so I was a real wallflower." At Sussex University, she read for a degree mysteriously titled "Intellectual History with French" and, on graduating, decamped to Toulouse for a year. "All the Paris student agitators from 1968 had all moved there," she recalls, "so the university was always on strike."

What had her parents expected for her? "My parents expected me to get married and have children," she says shortly. She did so, eventually, marrying Philip Gould, the Labour Party's policy adviser whose public profile has taken something of an upward hike in the past year or so, and producing Georgia (11) and Grace (8). But in addition, she went into publishing and made a fortune early and through her own efforts. She worked in small imprints, such as Rider, where she published The Road Less Travelled, M Scott Peck's seminal work of spiritual wool-gathering. "It was a great bestseller for us," she said, "and when the Sunday Times finally deigned to review it and said, `Who in Britain needs this kind of inspirational crap?' I thought, Well actually, a lot of people, since it sells about 200,000 copies a year to, among other people, your readers."

Having thus discovered her Inner Rottweiler, Ms Rebuck went to work for Paul Hamlyn, the publishing visionary who later sold his company to the Reed Group for pounds 500m. But she hit the big time in 1982 when, at 30, she created the Century imprint with Anthony Cheetham, now chairman of the Orion Group. The jewel in Century's crown was Maeve Binchy, the Irish novelist, whose lucrative string of heartwarming Hibernian romances was one reason the company was bought by Random House in 1989. In a classic instance of the tail not just wagging the dog but running the board, Cheetham was made chairman of the group. After some bitter altercations he was eased out in 1990, and Gail Rebuck took over.

In the early Nineties, Random House was publishing 1,800 titles a year, and losing money fast. Ms Rebuck cut back the number of titles to 1,200 and began to focus her staff more closely on the books they really wanted to be involved with. She now runs the two dozen imprints with just three sales teams, who blitz the book retailers with carpet-bombings of charm. But she understood that the essence of publishing is personal and individual, that an imprint's list of titles is a reflection of the taste and personality of the publishing director. And Rebuck's own taste? At what moments can the chief executive's own taste make itself felt? Once or twice in the past, it's made itself known. Rebuck took a personal interest in Robert Harris, the journalist and chronicler of true-life media scandals (Gotcha!, The Hitler Diaries) whose first novel, Fatherland, she bought and launched on the world in a media frenzy. Harris is now one of Random House's superstars - along with Louis de Bernieres and Sebastian Faulks, he's a big draw on the Writers' Group circuit - and Ms Rebuck is protective about him. In one scene from a TV documentary that was made around the writing of Harris's second novel, Enigma, concerning the Bletchley code-breakers, Rebuck summons one of her charges, Sue Freestone - Harris's editor - to explain why the final manuscript hasn't been delivered. There's no mistaking the flash of Eastern European fury in Rebuck's eye as she prepares to deliver a bollocking to the hapless, all-American Freestone. ("That was pure acting," says Rebuck, laughing. "The past recreated." With chilling accuracy, one silently replies.) Her current proteges are two new novelists, both British and under 30, called Neil Cross and Bo Fowler, both published by Random House this year.

"I concentrate on new, unknown writers," she explains, "because the established ones can take care of themselves." Didn't she ever read for pleasure, without having to feel like a talent scout? Couldn't she sometimes take a month off and catch up with the oeuvre of, say, Patrick Hamilton or Sir Walter Scott? "I never have time. But, luckily, I'm very keen on lots of writers we publish. Like Anne Tyler, about whom I've a pure, mad passion. Really, the only thing that really annoyed me about that Bertelsmann weekend," concluded this driven, irritable, relentlessly corporate but intriguingly impassioned woman, "was that I took the proof of the new Anne Tyler novel, A Patchwork Planet, home with me as a treat - and couldn't read it because of all the disturbance." Her dark eyes flashed. You could almost hear the whole Bertelsmann empire shift nervously from foot to foot