Booktopia, Australia’s largest online book retailer, went into voluntary administration last week. The store’s closure would be particularly wounding for some Australian small publishers that have grown to rely on Booktopia as their primary sales channel. The news comes as Australian physical bookstores strive for innovation to compete with massive online brands. While some writers and readers are stunned at Booktopia’s imminent closure, the news is unsurprising to many in the industry.
Booktopia’s peak success was in the 2022 financial year, but it has suffered a quick decline in profitability in the last two years. The company debuted on the Australian Stock Exchange at $2.30 (£1.20), but had fallen 98% to just four cents by June, when it was suspended.
Co-founder Tony Nash was ousted from his CEO position in July 2022 after helming the company for 18 years. He has remained involved with the company, which has seen a string of leadership changes in the years that followed.
Booming business across the COVID-19 pandemic saw Booktopia pour millions of dollars into new warehouse technology and other growth ventures, despite posting financial losses. In 2023, the company doubled its warehouse space and introduced automated packaging. The move may have been the lethal wound in the company’s bottom line, with its losses skyrocketing. Booktopia reported a loss of $16.7 million (£8.7 million) in the six months up to December last year, compared to just over $3 million (£1.6 million) a year previously.
An examination of Booktopia’s collapse reveals a poorly managed business. The news is a relief for the Australian book and publishing market. The industry is robust and resilient, but Booktopia is not.
Booktopia a ‘villain’ in the Australian book industry
Robbie Egan, CEO of BookPeople Australia, tells ArtsHub that the news of Booktopia’s closure elicited a complicated response from his members. ‘We never like to see an organisation close,’ Egan says, ‘especially when people have lost jobs and suffered.’ At the same time, Egan adds, the story of Booktopia’s recent history has meant its closure triggers some schadenfreude among booksellers.
In 2022, after Nash’s departure from the CEO position, David Gaunt, owner of Sydney’s Glebebooks, told The Sydney Morning Herald that many corners of the industry were laughing at the company’s expense.
The COVID-19 pandemic was initially a huge boon for many e-retail companies, including Booktopia. Across 2021, Booktopia decimated Amazon’s Australian online book sales. As the company pivoted to keep up with demand, costs and losses rose. Nash’s management of the company fell under scrutiny, and he wasn’t shy about his lack of experience in running a publicly listed online shopping platform.
‘It’s time to hand over the leadership reins to someone who is more capable than me at the job description,’ he said at the time.
Investors were troubled by Nash’s departure, which came six months after he sold a large portion of his 16% share of the company. He made $6 million (£3.1 million) from the trade, barely a week after the Chair had told shareholders at an annual general meeting that Booktopia’s outlook was rosy.
At the same time, the consumer watchdog investigated the company over its returns policy. Customer trust was also damaged when titles listed as ‘in stock’ took weeks to appear.
Booktopia would never recover from these blunders, gradually laying off staff and losing its market share to other competitors. Now, Dymocks is interested in acquiring some of the company’s assets, as are QBD and Kogan.
What Booktopia’s closure means for Australian writers
Australian authors such as Nicola Moriaty say they always felt personally supported by Booktopia. Moriaty told ABC News that the staff had always been warm and welcoming when she went to the Sydney office to sign books. She was there as recently as May.
Crime author Michael Brissenden believes the loss is enormous. ‘It’s a shame now that we don’t have an Australian online outlet. Although many of the big chain stores in Australia do quite a lot of online retailing as well,’ he told ABC News. ‘So, it’s better to do that, I think, than to give your money to a big international company like Amazon.’
The loss of an exclusively online Australian book retailer may pose an accessibility issue for some customers. In reality, however, almost every independent bookstore handles online sales. ‘Every person opening a bookstore now knows that the online space is critical for any success,’ Robbie Egan tells ArtsHub.
For some physical bookstore owners, their online traffic proves to be their largest slice of business. ‘We’ve grown to think of the physical store as a showcase,’ says Comics Etc owner James Jagic. The online shopfront for Comics Etc has become a robust piece of software tailored to buying comics.
Fiona Stager, owner of Avid Reader in Brisbane, doubles down on the unique offerings of a physical store, including book clubs, education packages and events. ‘It’s so much more than running a bookshop,’ Stager tells ArtsHub. ‘What you see at the front of the store is really just the tip of the iceberg.’
In Melbourne, Managing Director of Readings Joe Rubbo told The Age that his company’s approach to retail encourages browsing and a sense of place that cannot be matched online.
Still, while physical stores are diversifying, it is difficult to imagine how Booktopia’s closure won’t immediately benefit Amazon, which has no stake in Australia’s local industry.
Booktopia’s shares are currently suspended while administrators commit to the assessment process. While its online store is still operating, many users are complaining that their orders aren’t being fulfilled.
Booktopia was unavailable for comment.
