The Australian bookselling industry is a substantially different place as a result of the collapse of REDgroup Retail.

As the administration process of what was once the country’s largest bookselling network draws to a close (we are still waiting on a second meeting of REDgroup’s creditors to find out how the funds will be distributed), we are beginning to get a glimpse of what life after Angus & Robertson (A&R) and Borders will be like.

When the board of REDgroup called in administrators Ferrier Hodgson on February 17 this year, the group, which also owned the Whitcoulls bookshop chain in New Zealand and still owns the Supanews newsagency chain, had close to 190 bookshops in Australia. There were 26 Borders shops across the country, 116 A&R company-owned shops and 47 A&R franchise shops.

The first shop closures were announced within a week of the group entering administration. 37 A&R company-owned shops, and one Borders shop, were the first casualties. This was followed by another 12 A&R company shops in April, 16 Borders shops, also in April, six A&R company shops in May, nine Borders shops in June, and 42 A&R company shops in June.

In July, a final announcement was made:  the administrators had sold three A&R company shops (one to Dymocks), and the remaining 16 A&R company shops would close, and the sale of three A&R company shops (one to Dymocks). To the surprise of many outside the industry, this final announcement also included the closure of the much-loved Reader’s Feast bookshop in Melbourne’s CBD.

According to reports from the Weekly Book Newsletter, 139 bookshops in Australia have been lost because of the administration of REDgroup. Including over 200 redundancies at REDgroup headquarters and distribution centres in Melbourne, close to 2100 bookselling jobs no longer exist.

But it is not just about the quantity of bookshops that have been lost; it’s also about where these shops were located. While the Borders shops were generally located in large shopping centres or precincts, Angus & Robertson shops were often the only general bookshops located in suburban or regional areas. Some of these suburbs and towns are now without a dedicated bookshop:

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The online businesses of REDgroup Retail are still operating. Pearson, one of the country’s largest publishers, announced in July that it had reached an agreement with Ferrier Hodgson to purchase the businesses, which includes the A&R and Borders websites. It may not be smooth sailing, however, with the Australian Consumer and Competition Commission also announcing this month that it will conduct an “informal review” of the acquisition, which some Australian booksellers have said is bad news for the industry.

The A&R franchise network is also still operating, although the future of the network is unclear. We know that a significant number of these franchises will join Collins Booksellers, with Collins CEO Daniel Jordon telling the Weekly Book Newsletter this month that negotiations with many of the franchises are continuing. These shops will rebrand as Collins shops.

In April, 25 A&R franchises declared their intention to terminate their franchise agreements with REDgroup on the basis that the group was no longer providing value to the shops. Ferrier Hodgson took the 25 shops, many of which had immediately rebranded as independents, to court and a “truce” was declared. Whether these shops will be able to operate as independents remains to be seen.

The picture in New Zealand is somewhat brighter. Ferrier Hodgson were able to reach an agreement with the James Pascoe Group (which owns Farmers department stores and several jewellery chains in Australia and New Zealand) in June to sell the Whitcoulls brand and several Borders shops which are likely to be rebranded as Whitcoulls outlets, with some 900 existing staff staying on to work for the new owners. Previously, the administrators had been able to sell 10 Whitcoulls airport shops as well as the Bennetts outlets located in New Zealand universities.

So what does this all mean?

In 2009, the number of Australian bookshops stood at about 2270. Following the REDgroup administration, and other shop openings and closures, we know that this figure is now about the 2000 mark.

A decrease in the number of chain bookshops actually has the effect of increasing the percentage of the market occupied by independent booksellers. Figures from Nielsen BookScan, revealed at the recent Australian Booksellers Association annual conference, show that the market share of Australian independent bookshops has increased from about 20% to 22.5% since the beginning of this year. As Text publisher Michael Heywood said at the conference, Australia has “become a nation of independent booksellers overnight.”

The strength of Australian independent bookshops is one of the key things to take away from the REDgroup experience. Several independents already have plans to build ebookstores, and many more will follow over the next few months. The Australian Booksellers Association is rolling out the Indiebound program, which encourages customers to support their local businesses. And on August 20 the country will celebrate National Bookshop Day.

Peter Fray

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