Online retailer Booktopia goes into voluntary administration
- by Admin
- July 3, 2024
In short:
Australian book retailer Booktopia has gone into voluntary administration.
The company has been trading at a loss for over a year and earlier made 50 staff redundant.
What’s next?
Administrators are looking at selling or restructuring the main Booktopia business and its three subsidiaries.
Australian online book retailer Booktopia has gone into voluntary administration, leaving customers in the dark about the status of their orders.
An “urgent assessment” of Booktopia’s assets has been flagged, with a possible sale or restructure the focus of three administrators from McGrathNicol Restructuring, who have been appointed to head the evaluation of Booktopia Group Limited and three subsidiaries.
The company’s shares have not traded on the ASX since June 13 while it was attempting to secure additional funding.
In its initial public offering in 2020, Booktopia issued shares at $2.30 and debuted on the ASX at $2.86.
The stock has since lost more than 98 per cent and last traded at $0.045.
Booktopia suffered a $16.7 million loss for the six months to December 31, compared to a $3.9 million loss a year ago.
The company has said that economic headwinds and the continued soft performance of the Australian book market had diminished its core business which was selling books via two websites, Booktopia.com.au and angusrobertson.com.au.
Both remained operational on Wednesday.
The company was founded in 2004 by current executive director Tony Nash, his brother Simon Nash, and Steve Traurig.
A transition to a new $12 million robotic warehouse in the Sydney suburb of South Strathfield that opened last year had also been plagued with difficulties and had not resulted in the cost savings the company had expected.
Impact on publishers and writers to be felt
Robbie Egan, chief executive at the Australian bookseller’s association, BookPeople, said the collapse was “deeply problematic” for the industry at large.
“This is a hole that needs to be filled and I feel for the writers, publishers et cetera that will feel this,” he said.
The company had announced 50 redundancies in June as a cost-saving exercise alongside $1 million in funding from AFSG Capital, in an announcement that included the news of chief executive David Nenke tendering his immediate resignation.
“It’s not an industry problem, it’s a particular business problem,” Mr Egan said, describing the business’ structure and scale as a “value-destruction exercise”.
“There’s no doubt, some of the bleed from online will go to Amazon,” he said, describing the prospect as worrying.
Customers left hanging
Natasha Wing ordered three books on June 5, and so far has received only one in the mail.
The other two appear to be in limbo, or “on order” according to a shipment notification seen by the ABC that states shipping would be within 7-10 days from the order date.
She said she was really frustrated with the lack of communication.
“I purchased something that was supposed to be in stock. It should be sitting in a warehouse,” Ms Wing said.
A follow-up query to Booktopia’s customer service department to ask about the shipment date was not answered.
“At this point we should be getting a group email to say if they are going to keep shipping orders that have been paid for,” Ms Wing continued, saying she didn’t want to have to wait for creditors’ meetings to receive her items.
ABC/AAP
Posted , updated
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