Booktopia, once a prominent online book retailer in Australia, faced financial turmoil when it accumulated debts amounting to an estimated $60 million. The majority of this debt was owed to publishers supplying stock to the company, with an additional $15 million owed to customers holding orders and gift vouchers. In July, Booktopia appointed administrators to explore restructuring or selling the business to alleviate its financial burdens.
After a period of uncertainty, the administrators confirmed the sale of Booktopia to online electronics store digiDirect. This acquisition included the Angus & Robertson and Co-Op Bookshop brands, along with approximately $14 million in inventory. The deal was orchestrated by McGrathNicol, who described digiDirect as a leading Australian-owned omnichannel consumer electronics retailer.
Keith Crawford, a partner and administrator at McGrathNicol, expressed optimism about the sale, stating that transitioning Booktopia to a well-known Australian retailer was a positive outcome for all stakeholders. The new owners of Booktopia, digiDirect, announced plans to resume trading immediately, with a formal relaunch scheduled for late August once operational processes were back in place.
Shant Kradjian, the founder and owner of digiDirect, highlighted the potential for revitalizing Booktopia’s business and implementing improved systems and processes. He emphasized the opportunities for shared expertise and efficiencies that could enhance the experience for customers of both Booktopia and digiDirect.
Despite the sale, concerns lingered regarding the fate of previous book orders and outstanding gift cards. When Booktopia entered administration, approximately 150,000 orders worth $12 million remained unfulfilled, along with $3 million owed to customers holding gift cards. McGrathNicol indicated that digiDirect was offering special arrangements for customers with unredeemed gift cards.
While the sale of Booktopia to digiDirect was a significant development, it was noted that the final sale price was insufficient to cover the entirety of Booktopia’s debts. As a result, only secured creditors like banks and Booktopia’s employees were expected to receive funds from the sale. The deal did not include provisions for repaying the retailer’s outstanding debts.
The collapse of Booktopia had repercussions within the publishing industry, with some customers seeking refunds through credit providers and publishers potentially relying on credit insurance to cover their losses. Industry observers noted that the void left by Booktopia’s demise had led customers to shift their purchases to competitors like Amazon and The Nile.
Booktopia’s journey from a celebrated online bookstore to financial distress underscored challenges such as profit losses, regulatory fines, and leadership turnover. The company’s struggles culminated in its decision to enter voluntary administration, ultimately leading to the sale to digiDirect. As administrators prepare for a second creditors meeting, the future of Booktopia under new ownership remains a topic of interest within the Australian retail landscape.