Australia's largest bookselling chains fall into administration
01.01.70 | Philip Jones
The Australian book trade has been hit by the surprise collapse of REDgroup, which owns the country's largest bookshop chain Angus & Robertson, as well as Borders and the Whitcoulls chain of newsagencies in New Zealand.
It comes just hours after Borders US, no longer associated with Borders Australia, finally filed for Chapter 11 after weeks of uncertainty.
The Sydney Morning Herald described it as a "voluntary administration", and said that REDgroup was forced to call in administrators to the businesses following a board meeting. Although its flagship Borders franchise is expected to remain open in the short term, its future in Australia and the jobs of its staff are now in doubt.
The outlook is similarly grim for Angus & Robertson, which has a corporate history in Australia that dates back to 1886 when David Angus and George Robertson opened a bookshop in Sydney. New Zealand-based Whitcoulls is even older. It was originally named Whitcombe & Tombs after its founders joined their businesses in 1882, according to the company's website.
According to SMH, Ferrier Hodgson Partners were appointed voluntary administrators of REDgroup Retail Pty Ltd. Bookseller + Publisher reports the administrator indicated that the company's stores would continue to trade while administrators conduct an urgent assessment of the business's financial status and prepare for the first meeting of creditors, expected to be held in March.
Analysts blamed the development on internet competition, and a return to thrift after Australia caught the tail-end of the global recession. Christmas was understood to have been particularly poor for Australian booksellers. The bricks and mortar retailers have also been hit by the demand for cheap imports from websites such as The Book Depository and Amazon. Separately Amazon.co.uk announced overnight that it was to extend its free shipping offer into Australia and New Zealand.
It is also another troubling development for Kobo, the e-bookseller which partnered with Borders US and the REDGroup in Australia. The SMH reported that Malcolm Neil of the Australian division of e-book retailer Kobo assured customers their electronic versions of books would not be affected by the collapse of REDgroup. It had earlier assured its US customers following the Chapter 11 filing at Borders.
In October REDgroup unveiled a full-year loss of $43m, and warned it was likely to breach two of its three banking covenants due to increasingly tough trading conditions.