You've heard it many times before. There is no money in publishing.
There isn't much, to be sure, and if you are a small independent press, there very much is no money in publishing. To break even, at the least, requires a lot of unpaid hours. A labor of love, so.
Samhain is the latest loss to the publishing world. They were never huge, never one of the big five houses. They did not crank out blockbuster bestsellers or celebrity tell-alls. Their mission was to bring good stories to life while filling some particular niche that the major publishers thought too small to notice.
The financial climate being what it is, the readers that Samhain reached are no longer able to buy up all the books they might otherwise have purchased if they had extra cash for luxuries. Their audience was largely romance readers, who are known to consume novels as if they are starving for release from life's stresses. When one of those stresses becomes an overdue electric bill, well, there you are. You have to keep your lights on. There are other places to find cheaper entertainment than what you'd find from Samhain.
Self-publishing has produced a bounty of romance titles, and a self-publishing author enjoys much lower overhead than a small publisher with any staff on salary. It is easy enough to churn out an e-book without requiring much outside help, and if that author wants to generate some buzz there will be copies given away to reach potential readers.
How can a publisher compete with free books, or books offered at a discount?
Samhain lasted for just over a decade, a time in which self-publishing changed the environment radically. A business model that worked in 2005 has stopped working because things have changed, and Samhain's model simply doesn't work any longer. They could retool, perhaps, but would a full re-organization make a difference, or would it mean nothing more than giving all but a few employees the sack and then expecting the last remnants to work without respite, and compensation, to keep the house open?
Those who might once have looked to Samhain to get their romance novel published are more likely to turn to Amazon's Kindle Publishing platform or Smashwords. All proceeds then flow to the author, who is free to hire their own marketing and publicity people if they want, or do their own promotions. They can tweet and Facebook and round up friends to help spread the word. Whether or not they sell as many copies as they would have if Samhain had been their publisher is a point of debate that can no longer be settled by trying both methods of publishing.
Samhain has been forced to shutter its operation. There just is not enough money in publishing on a small scale when the small scale competition is so very strong and the reader's wallet is largely empty.