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A headline figure of £25m for publishers' exposure to EUK has emerged as the stricken distributor axed 700 posts, with as much as £10m still left at EUK's various depots.
Ian Hudson, Publishers Association president and number two at Random House, put an invoice value of £25m on the book stock held by EUK at the point of it going into administration on 26th November. However, a considerable proportion of that stock was on supermarket's shelves, and has since been bought by consumers, and at least another £1-£2m worth has trickled out of EUK since it went into administration. That stock was released after a deal was agreed by the PA and a group of leading publishers with the administrator (Deloitte) to value the stock at 70p in the pound.
It is impossible to accurately quantify the amount of stock now stuck in EUK itself, but it could be as much as £10m-worth. With only a skeleton staff remaining, very little of that can be released in time for Christmas even if retailers place orders. "This is a huge hit for the publishing industry," said Hudson. "There are still a lot of books in that warehouse that aren't going to get sold this Christmas."
Hudson paid tribute to EUK, which now looks very close to a final collapse into liquidation. "I think it's really sad that EUK has been dragged down by an underperforming retailer. They had some good people there, and a really good operation."
Hudson said "the administrators have played it by the book", but this had "meant that publishers have lost out - by slowing down retention of title claims by the publishers in favour of the banks."
When retention of title has been fully established, stock will be returned to publishers, to dispose of as they see fit. Although some will be re-sellable, much of it is seasonal Christmas gift stock that is essentially worthless after Christmas and will need to be pulped.
Meanwhile, Hudson expressed continuing support for Bertrams, which is owned by EUK but which is not in administration. "I would call on all publishers, distributors and booksellers to continue to support Bertrams while they [the management] look to do a deal to save the company."
He revealed that as a gesture of support publishers had "frozen their debt" with Bertrams. "The whole publishing world would be concerned if Bertrams goes: we need a choice between two trade wholesalers."
The options for Bertrams are a management buyout, a trade sale or a private equity deal - all far harder than would have been the case a year ago because of the credit freeze.