Booktopia, Australia's struggling online bookseller, has filed for "voluntary reorganisation," under which three administrators will conduct an "urgent assessment of Booktopia's business while options for its sale and/or recapitalisation are explored," according to a statement.
In May, the company lowered its sales forecasts, its CEO resigned, 50 staff members were let go, and it took on a revolving debt facility at an 18% interest rate. Since then, Booktopia's nearly worthless shares have been suspended from trading on the Australian Securities Exchange.
The company's sales grew dramatically during the pandemic, and it invested in an A$12 million (US$8 million) robotic warehouse that opened last year and has had operating problems. Booktopia cited "economic headwinds and the continued soft performance of the Australian book market" for diminished sales.
Robbie Egan, CEO of Bookpeople, the Australian booksellers association, told ABC that Booktopia's problems are "not an industry problem," but particular to Booktopia whose structure and scale he described as a "value-destruction exercise." Still, "this is a hole that needs to be filled and I feel for the writers, publishers, etc., that will feel this," adding that "some of the bleed from online will go to Amazon."
In an interview with 9News, Egan noted that in his six years as CEO, bookstore membership has risen and during the current difficult economic climate for consumers, industry sales are down only 2%, "a really good performance." He also spoke about bookselling trends and the importance of bookstores.