While most book lovers are unaware of Booktopia’s troubles, it’s a page turner that has been gripping the book industry | sdanck
David Gaunt, the co-owner of a humble but very popular bookshop in Sydney’s Glebe, can’t help but crack a smile.
“Publishers I talk to are profoundly interested in what’s happening, but they won’t necessarily talk about it because they’re now their biggest customer.” But some believe Booktopia has problems that go beyond a shift in behaviour by consumers after the lifting of pandemic restrictions, with concerns about the leadership of the company and the loss of investor trust.Over the past 15 years, Booktopia has dominated the book selling sector in Australia, delivering more books than any other Australian operator.
In May, longstanding chief executive Tony Nash stepped down into a strategy role at the company he founded 18 years ago.“It’s time to hand over the leadership reins to someone who is more capable than me at that job description,” Nash said. “He’s the main target of investor disquiet. I think it’s the shortest time between a director sale and a downgrade that I’ve ever seen,” says a fund manager from an institutional investor holding shares in Booktopia.“On an investment basis, the company is now too small to matter, but the way the company talked it up all the time, we didn’t know ,” the fund manager says.
Nash and his family have also shared the bath that investors have taken. While Nash himself has made around $10 million from selling down his shares in Booktopia over the course of its listing, his retained holding has withered from more than $58 million to just a touch over $3 million this week. As well as selling, Nash has been a buyer, picking up $375,000 worth of Booktopia’s shares in the company in May.
While Booktopia started as a small business, it was quickly growing. Gaunt of Gleebooks estimates that it has been bigger than his business since 2007. Its 2018, attempt to raise $10 million via a crowdfunding campaign was also thwarted after the corporate regulator intervened and asked Booktopia to revise its offer documents to emphasise going concern risks to investors.
Books that were ordered on the promise they were “in stock” were taking weeks to arrive with messages being sent to customers saying it was due to products not actually being in stock or publisher delays.Other customers had noticed repeated chapters, split book spines, damaged covers, missing pages and jigsaws with missing pieces.
Nash also concedes that Booktopia did face some delivery issues at the height of the pandemic due to staffing and lockdown restrictions that affected its distribution centre, but says shipping times have now returned to normal levels of one-to-two business days.It is clear from Booktopia’s social media pages that it remains a very popular business with its customers and many review websites carrying far more five-star reviews than any other rating.
“Booktopia sells a lot of books and authors like the fact that they can link with them; they can do affiliate type deals; there are all sorts of avenues open that we’re working on getting for small to medium-sized bookshops, but they don’t yet do that.”“You can’t be an online only play and not pull certain levers and use certain modes of doing business that put you in direct contest with smaller retailers.
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