UPDATE

For the most detailed reports on the REDgroup administration process over the past few months see the Bookseller+Publisher website.

As the news of REDgroup retail going into voluntary administration shines a light on the challenges that have been facing many local booksellers for some time, we find ourselves answering familiar questions over and over again.

So, in no particular order:

• Some of booksellers’ woes are common to all retailers, some are specific to booksellers
• Among the former: no stimulus package payments for Christmas 2010, a strong Australian dollar, overseas online competition (helped slightly by lack of GST on overseas purchases), move by consumers to online purchasing whether driven by price or not
• Among the latter: fewer ‘big books’ for Christmas 2010 (no Stieg Larsson, no Dan Brown, no Matthew Reilly)—as supported by Nielsen Bookscan figures which showed top 10 bestsellers down 50% over Christmas sales period, ramifications of Australia’s Parallel Importation Restrictions, ebooks (though not yet nearly as much of a factor as most journalists would like to make out)
• 2010 was the first year in its 10-year history in Australia that Nielsen BookScan reported a decline in book sales by mainstream retailers
• Anecdotal evidence in the local book industry suggests around 10-15% (possibly more) of book sales to Australian consumers are from overseas online retailers and the current strong Australian dollar and visibility of price differentials mean this proportion is growing
• Some in industry point to poor management on REDgroup’s part but there’s no denying that factors mentioned above have played a role in the chain’s decision to go into voluntary administration
• Anecdotally REDgroup’s ebook offering (on the Kobo platform) was an area of growth
• Majority of local bookshops that offer online sales facilities report growth in this area each year
• Local booksellers who sell only online report huge growth each year
• Around 60 Angus & Robertson stores are franchises, which are not in fact owned by REDgroup but simply pay REDgroup for marketing and use of Angus & Robertson name
• REDgroup company owns the remaining 100-plus Angus & Robertson stores in Australia
• REDgroup owns Borders stores in Australia, New Zealand and Singapore
• REDgroup owns Whitcoulls stores in New Zealand
• REdgroup reported a loss of $43 million for the financial year 2009-10
• The company has gone into voluntary administration, not receivership
• Administrators Ferrier Hodgson intend to meet with REDgroup creditors in first week of March
• REDgroup is owned by private equity firm PEP
• REDgroup stores represent approximately 23% of the Australian book market
• REDgroup’s 2010 revenue was over $500 million
• Most in the industry were expecting a contraction in the local book retail market, even before REDgroup news
• A contraction in local book retailers will have flow-on effects for local publishers
• All REDgroup stores are open and continuing to trade under administrators.