Bertrams has made 20 roles redundant and is recruiting a new managing director following a drop in profits over the last six months.
The Bookseller understands Bertrams has employed recruitment company Russell Reynolds Associates to find a new managing director. Current m.d Graeme Underhill, who is approaching retirement age at 57, was appointed as m.d of Bertrams in July 2011, moving from his position as operations director at the Connect Group (then Smiths News Group PLC), Bertrams’ parent company, and has worked for the group for many years. Neither Bertrams nor Underhill would comment on the development.
The book wholesaler warned that its year-end profits would be lower than expected last month after seeing “slower than anticipated” returns on recent investments in the six months to the end of February 2014. Following the news, the share price dipped at Bertrams’ parent company The Connect Group.
A spokesperson for Bertrams said the company was now focusing on “recovering profits” at the company. “The entire team are working hard on delivering profit recovery. We issued a pre- close statement stating that Bertrams total revenues continue to grow at c10% driven by growth in (online retailer) Wordery. However, the ongoing mix of lower margin categories, price competiveness and delays in realising the benefits from investments to drive long term growth will result in profits being below last year.”
The company is also recruiting for a finance director and IT director after the previous holders, Ian Hendrie and Hugh Mcgill “left of their own accord for new jobs.”
The Norwich-based wholesaler would not say which departments the 20 out of 600 jobs had been made redundant from. A spokesperson for the Connect Group which categorises Bertrams under Connect Books, said: "Regrettably, it has been necessary to make a number of staff redundant in response to the challenging markets. As a matter of policy we do not comment on individual staff or managers. Meanwhile, Graeme and the senior team at Connect Books are fully focused on delivering a sustainable improvement in performance that will support the Group’s ongoing investment in the business."
Bertrams reported total sales of £106.6m for the six months to the end of February 2014, which increased 8.4% on last year. However, underlying operating profits fell by 33.8% to £2.3m at the firm. While its online retail platform Wordery saw strong growth with sales in excess of £20m per annum, accounting for 11% of the company’s total book sales, Bertrams saw lower digital and academic sales due to “tighter university budgets and strong competition from both publishers and aggregators” and “margin erosion from pressure in UK trade and libraries.”
Going forward, the company plans to invest in its digital proposition, which includes acquiring new content and upgrading the existing UK platform and developing French, Spanish and German language platforms.
In March, Bertrams’ parents company announced it was changing its name from Smiths news plc to The Connect group to coincide with its strategy of becoming a more “broadly diversified specialist distribution business.”