Wholesaler Bertrams has bought Blackwell's' academic library services contracts for £2.1m. Fifty-five Blackwell's staff are likely to be made redundant as a result of the move, which follows a decision by the retailer to close its library supply business.
Bertrams revealed the news as part of a Smiths News trading update for the six months to 28th February 2013, in which it revealed like-for-like revenue was up by 2.8% and operating profit was up 7.6% to £3.5m.
Bertrams said the acquisition of European and African academic library services contracts under its Dawson Books arm would generate £10.5m of revenue and increase its total international sales to £60m on a pro forma basis.
The deal was struck as Blackwell's decided to close its library services division to concentrate on its retail and digital arm and "reshape the company for the 21st century". The company began a consultation with staff yesterday (16th April), which is likely to lead to 55 redundancies.
Blackwell's David Prescott said: "The Blackwell's Board is focused on our bookshop business and the direct opportunity to develop our digital offering to student, academic and professional customers. We are making this move to invest and tailor our services for the future as Blackwell's remains determined to be at the forefront of these developments."
He added: "We deeply regret that one of the consequences of this closure will be a redundancy programme which is likely to result in about 55 redundancies, subject to consultation, of people that I have worked with for many years. Blackwell's will be seeking to find alternative positions for some employees and we will help them find future employment elsewhere if necessary."
As part of a decision to focus on the bricks and mortar retail arm of the business, Prescott, formerly managing director of Blackwell's bookshops, has been promoted to chief executive officer of the company and Kate Willemite, currently financial controller, has been promoted to finance director.
However, Diane Kerr, managing director of Blackwell's Library Services, will step down from the board and Mark Little, group finance director, will also leave the business. Blackwell's chairman, Trevor Goul-Wheeker, said Kerr and Little had been "instrumental" in developing the strategy to re-shape Blackwell's.
Mark Cashmore, chief executive officer of Smiths News, Bertram's parent company, said: "We are delighted to be further extending our international books business offering following the completion of this complementary bolt-on acquisition. Our ability to build both scale and reach will enable Bertrams to target key international markets as we continue to capitalise on expansion opportunities."
The acquisition will be completed by 20th May and both companies stressed it would be a smooth transition for customers.
In the six months to 28th February, Bertrams revenue was up 7% year on year to £98.3m, total like for like sales increased by 2.8% and operating profit up 7.6% at £3.5m. Digital sales grew by 47% and international sales were up 4.3% like-for-like. The company has also won an exclusive three-year-contract to supply WH Smith Online.
Wordery, a marketplace trading company which Bertrams launched before Christmas with former Book Depository employee Will Jones, made £3m in revenue its first six months trading, Bertram's managing director Graeme Underhill said. It now sells on the market places of Amazon, eBay and Play.com and deliver to 50 countries worldwide.
Underhill said: "Everyone at Bertrams is incredibly proud of this performance. The fact that we have been able to build on the growth we achieved last year despite challenging market conditions really is testament to the strength of our offer to publishers.
"We are investing in our business, our people and our stock, delivering against a clear sales-led strategy and seeing UK and international print and e-book sales grow accordingly."