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When Martha Sharpe was installed as editorial director of Simon & Schuster Canada earlier this year, the news was celebrated by authors and agents who envisioned the company's newly-established publishing program as a possible competitor to the country's multinational-dominated publishing scene. In an era of declining advances, editorial layoffs and bankrupt publishers, this was some good news.

Sharpe's mandate, she told me in January during an interview in the company's downtown Toronto office, was to "build a really strong Canadian program."

Kevin Hanson, president of Simon & Schuster Canada, was bullish about his new hire, who had earned a sparkling reputation as editor of House of Anansi in the late nineties and early 2000s, nurturing early books from authors such as Lisa Moore, Sheila Heti, Michael Winter and Ken Babstock.

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"I hope that when we speak in five years, and we look back on some of the acquisitions that she's made, we can say, 'Yeah, that was a really good hire,'" Hanson told me in January. "And I fully expect that will be the case."

This is not the case.

After less than one year on the job Sharpe is out, along with associate publisher Alison Clarke, who has been with the company for over 16 years, leaving the direction of the program uncertain and the country's literary insiders speculating how it fell apart so quickly.

"It's a kick in the gut," said literary agent Samantha Haywood, when informed of the news on Tuesday evening, describing it as "Black Tuesday for Canadian publishing." Earlier on Tuesday it was announced that HarperCollins is shutting down its Canadian warehouse, leaving upwards of 120 people out of work, including long-time president and CEO David Kent, who will depart by the end of 2014.

"This whole thing comes as a surprise to me," said Chris Bucci, a Toronto literary agent, on Wednesday. Bucci had advised Sharpe, who was then based in New York, to get in touch with Hanson after Simon & Schuster Canada's new publishing program was announced in May, 2013.

Sharpe was hired by Hanson last fall, and quickly made a splash by acquiring Sheila Heti's sought-after new book on motherhood. Yet, privately, some expressed puzzlement at the hire, noting that Simon & Schuster's list skews commercial, while Sharpe has distinctly literary sensibilities.

"It just wasn't the right fit," said one agent. "I think in this case [Hanson] saw that things were not working the way he needed them to."

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Among the titles acquired by Sharpe during her tenure were books by Heti, as well as memoirist Iain Reid, debut thriller author Amy Stuart, and Irish novelist Eimear McBride, whose avant garde debut, A Girl is a Half-formed Thing, was published by Simon & Schuster Canada in September.

"Martha is a brilliant editor and I was really looking forward to working with her again, and to seeing all the great things she'd do at Simon & Schuster," wrote Heti in an email.

Neither Hanson nor Sharpe could be reached for comment. Amy Cormier, the company's director of publicity, confirmed that Sharpe and Clarke are no longer with Simon & Schuster Canada, but that "we are not able to comment on staff who have left the company."

Phyllis Bruce, who remains on staff as the editor of her own imprint, wrote in an e-mail that "we are pressing ahead with a substantial publishing program."

"There is not even a speck of a doubt in my mind" that the program will continue said literary agent Jackie Kaiser. "I'm optimistic that [Hanson] has a better understanding now of exactly what he needs to put in place to make Simon & Schuster a successful publisher."

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