Aug 11, 2010

Closing the book on retailing? Publishers nervous at giant’s health

Redgroup Retail -- owner of Borders and Angus & Robertson -- has been forced to jack up prices, increase returns and extend trading terms with its suppliers, leaving publishers anxious about the industry's health.

Tom Cowie

Crikey journalist

Australia’s largest book retailer is mired in debt and slashing its range, leaving publishers anxious about the industry’s health.

Redgroup Retail, parent of the Borders and Angus & Robertson chains, has been forced to jack up prices, increase returns and extend trading terms with its suppliers, according to industry sources. The company told the New Zealand Stock Exchange in July it was likely to breach two of its banking covenants at the end of the month, with debts believed to be in the order of $50-75 million.

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27 thoughts on “Closing the book on retailing? Publishers nervous at giant’s health

  1. Anth

    Surely the elephant in the room here is the parallel import duty and the impact of online retailers? I treat myself to a new book or three every payday. For a while I kept going into the retailers out of some sort of obscure sense of national duty, but in the end the dollars win out.

    I purchase books online from a UK online bookstore (, the purchase is transacted in Aussie bucks (no exchange rate issues or foreign currency transaction fees on my credit card), they charge me no postage, and the book arrives Royal Mail in about ten days. As a rule of thumb, they are half the price of books in Borders or Angus.

    Some of this prices differential would be rents etc, but much of it is surely the duty. How does it help new Australian authors to have retailers shutting down or minimising their number of titles?

  2. Cavitation

    While BookDepository in the UK is good, I prefer to use – a New Zealand based online store for books – which operates in Australian dollars. The cost of books is so much less online, that I can no longer afford to buy in Borders or A&R. The delivery cost is free (if you purchase over a certain amount – which you’ll do if you get more than a single book at a time) – I use the “wishlist” to save up and get a few books at a time.

    Borders sold out of their “Kobo” e-book reader, and there don’t seem to be any new supplies in the store yet… I planned to get one, but got tired of waiting, and instead go a new Android smart phone, which comes with the Aldiko e-book reader. I get all the other smart phone features, and the ebooks are easy to read on the phone. I’m very pleased with it. But Borders lost a Kobo sale…

  3. Anth

    Yep, I use Fishpond when it’s cheaper than book depository. I just prefer BD.

    I realised after posting that I do actually use the “hard copy” retailers – to go in and browse. If I spot something I like, I go home and add it to my BD wishlist!

  4. Gail

    My sympathies are not with these guys. Book publishers are the most recent King Canutes in a long line that stretches back to the invention of the printing press. In the last 2 or 3 years they have fought tooth and nail for the maintenance of a restricted and controlled market in Australia and they won the battle but stand to lose the war.

    There is a growing market in ebook retailing. Publishers and booksellers have stubbornly refused to take ebook publishing seriously and now find themselves in the same position the music industry was when cassette tape players became widespread (Remember the Sony Walkman). The release of the iPad has intensified this situation. The opportunity is there for them to embrace change or become buggy whip makers. Giving up buggy whip making doesn’t seemed to have harmed Amazon, Barnes and Noble or the Book Depository.

    Borders were absolutely swamped with customers for their Kobo ebook reader a couple of months ago but couldn’t supply because they seriously underestimated the demand and failed to grasp the opportunities in the Australian ebook market. Limited vision will give limited returns. Ebooks don’t need to be shelved, stored or returned once they are published.

    In the USA, Canada and Europe ebook readers, supported by ebook retailers, have been available for a long time now. Sony had an ereader available years ago although not easy to get in Australia. There are sales figures and information available on the ebook market. Amazon and Barnes and Noble have embraced ebooks but have geographical limitations in that not all readers are available in all markets and there are serious problems with the variety of ebook formats around that needs to be settled at some point the way music settled on the mp3 format. Specifically, Borders offer DRM riddled single format ebooks at a price similar price to that of a paperback deadtree book. They could choose to offer their entire range at prices more comparable with global prices which are easy to check.

    There’s room to move here in the Asia-Pacific and RedGroup have no excuse for being blind. Instead of putting some effort into developing a new and growing market, all the major publishers worldwide put their energies into trying to control and slow the growth of the ebook market. In Australia the privileged position of book publishers and sellers has been steadily eroded by globalisation. It’s easy for me to see that the Australian printed and ebook offerings are often more than twice the price of the same item from an overseas supplier.

    I’m only one consumer but I have bought 10-15 books, fiction and non-fiction, a month for over 30 years. I love bookshops and books. I will be sad to see some bite the dust but I can’t buy an ebook in a bookstore as they don’t sell them. They don’t even offer an ebook or digital version with the printed version. I’m the customer and I’m more than a little pissed off that the publishing industry entirely disregards my needs to support their limited business model.

    Years of music industry tantrums and politicking should be a lesson in how not to manage industry wide change not a project management plan for the book publishing industry.

  5. Bogong

    Redgroup recently bought Borders when the American parent group decided to bail out of Aust & NZ. If they already had cash flow and debt problems, why on earth did they buy Borders when they weren’t in a position to maintain it?

    Secondly, I’m not sure Kindle’s, iPad’s, ebooks, et. al. will ever take over from books. You can’t stick them in your pocket when you head out somewhere, you can’t read them in the bath and they are more awkward to read if you just want to slouch on the sofa. Then there’s the hassle of keeping them charged.

    I remember that my first real job in the early 1990’s as a spotty new graduate involved implementing a “paperless office” in a bureaucratic department. I was aware that I was a young kid, so I just did what I was told. But if anyone asked me what I privately thought, I said I didn’t think it would succeed because ‘people prefer paper’ and they would print off anything longer than half a a page rather than read it on screen. It turns out I was right then and I don’t think human nature has changed all that much in the intervening years.

  6. trash

    A quick search for a recent/current bestseller gives me the following choices:

    Go to angus & robertson and pay $12.95 (or order for another $6)
    Order from fishpond for $17.47
    Order from BD (US) for $7.92

    BD have in the past refunded for lost in transit and an abridged audio book when I thought I was getting unabridged! I can not fault them.

    In fact I have seen parcels from BD addressed to Mary Ryan’s at my local post office – I wonder if (a) they undercut staff discount or (b) when MR’s order in they do it from BD?

    I think Australian book shops are dead men walking.

  7. David Roberts

    My last experience in Borders was trying to find a title their system listed as in-stock. When it wasn’t on the shelf, the salesperson said it was received but not put on the shelf yet. I asked if I could order it in from their storeroom – told come back tomorrow…so bookdepository at half the price and 99% less effort (even takes paypal in A$) – after all I read reviews and generally find out about titles on-line, is the only way to buy. Everyone I’ve introduced to BD thinks our book pricing is robbery and are now too pissed-off to shop at the likes of A&R or Borders.

  8. Pdaddy

    “They’re spending, spending, spending, because they have to,” said Coronel.

    My god, what would barnaby Joyce and the Liberals think, dont you know if you are in trouble you must NOT spend and cherish every dollar..and perhaps have a little prayer.

    On a serious note, thanks for the online book tips I have been battling since moving back from the Uk where Amazon was a dream.

  9. trash

    PDADDY – try

  10. Meski

    CD’s went to mp3, videos went to bittorrent distribution, books are going to ebook, regrettably you have to fake out the ebook DRM system to make it think that you live in the USA, but that’s no big deal. The point in common is that end users will decide what they want, not publishers and retailers.

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