Online bookseller The Book People has gone into administration. The retailer, founded by Ted Smart and Seni Glaister in 1988 currently employs around 400 people, has appointed Toby Underwood and Zelf Hussain from PricewaterhouseCoopers as administrators. PwC said there will be no immediate job losses and Christmas orders already placed will be fulfilled. Publishers, however, will be concerned about unpaid bills on stock already supplied to the firm, or sitting in its warehouse.
The appointment of administrators was a result of the "difficult trading environment that the business has been experiencing, combined with increasing working capital pressures", said PwC.
Underwood, restructuring partner at PwC, said: “I can confirm that the business continues to trade and at this point in time no redundancies are currently envisaged whilst we rapidly explore a sale of the business. The intention is to fulfil and deliver all customer orders received and accepted.
"I appreciate the obvious concerns that staff in particular will have as we move towards Christmas. Whilst the administrators have funding to meet the payroll for December, the longer-term prospects for the business, staff, customers and suppliers will clearly be dependent upon whether a sale can be secured.”
Founded in 1988 The Book People is a long-established retailer specialising in selling children’s books and collections at competitive prices. The business is primarily an online retailer, with over 76% of sales through its online platform with the balance of sales via employed and self-employed distributors who deliver mobile book school fairs and buses, and pop-up stores in workplaces.
Sales in 2017 were £71.5m, with operating profit at £3.5m. The business has yet to report its 2018 numbers. Its Companies House report did note that the firm was reliant on funding facilities put in place by parent Endless, with loans in place until the end of October 2019. At the end of 2017, the business had cash in the bank of £4.6m, but net current liabilities of £13m. The decision to call in PwC suggests that Endless lost patience with the business, or was unconvinced about current trading conditions.
The business employs 393 staff and sells over 17 million children’s books each year— approximately three books for every child of primary school age in the UK. With its head office based in Godalming, Surrey, the business operates a 92,000 square foot warehouse in Bangor, North Wales, where deliveries to customers are co-ordinated. The Book People has been owned by private equity investor Endless since 2014. Endless told The Bookseller: “We cannot comment at this time.”
According to Sky News, sources said that the accountancy firm had been overseeing an auction of The Book People in recent weeks as Endless tried to secure a buyer. They added that a number of "credible" parties had expressed an interest in a deal.
PwC declined to give the number of companies which had expressed an interest.
The Book People website remains live and an e-newsletter was sent on Tuesday morning (17th December), advertising its "biggest ever winter sale".
When asked if orders placed today would be honoured, PwC said: "At this stage, it's difficult to say. All we know is that we're committed to any existing orders and [ensuring] that they are dispatched, there will be no redundancies in the short-term while a purchase is sought."
It comes after new c.e.o. Claire Bayliss outlined her vision for the company this summer with plans for a rebrand and a further restructure, to help the business move away from its "cheap" reputation to become "a brand with purpose", delivering significant profit over the next three years.