Booktopia enters voluntary administration
Booktopia has been placed in voluntary administration, with its administrators exploring options for selling and/or recapitalising the business.
The book retailer has appointed McGrathNicol Restructuring partners Keith Crawford, Matthew Caddy and Damien Pasfield as voluntary administrators, who issued a statement saying they are undertaking “an urgent assessment” of the company’s trading position.
The first statutory meeting of Booktopia’s creditors will be held on July 15.
The site continues to trade as normal as the administrators evaluate its financial position.
Booktopia asked for its share to be suspended from trading on June 23 as it pursued refinancing options. The suspension will continue during the administration process.
Today’s news followed the dramatic return of the company’s founder Tony Nash at the beginning of last month, as executive director with the expectation he would assume the sales director role for six months.
The move coincided with the departure of CEO David Nenke and the announcement of 50 redundancies predicted to save $6.1 million annually from FY25.
Those changes followed a strategic review announced in February after a decline in the first-half results.
“The sustained volatility of the economic climate, in addition to changing consumer spending behaviours, have continued to contribute to business results that have been below our expectations,” said chairman Peter George at the time, referring to the restructuring.
“The board remains committed to building a profitable and sustainable business in the short and long-term and as such, we have regrettably had to make the very difficult decision to make a large reduction in headcount and will commence the necessary consultation with our staff.”
Booktopia early last month said it had sealed a $1 million line of credit to fund the redundancies. However, in its June 21 request to suspend trade in its shares, the company said: “As reflected in its earlier announcements and particularly through its quarterly reporting, the company continues to face broader liquidity challenges and is seeking to identify alternative sources of funding liquidity, both to meet redundancy costs and to provide it with ongoing working capital.”
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