Booktopia, once Australia’s largest bookstore, is in chaos: customers are being told their pending orders will not be fulfilled and they will not receive a refund.
The company entered voluntary administration on July 3, just weeks after announcing it needed to cut 50 jobs to save $6 million.
On Wednesday, it emerged that Booktopia had laid off another 165 employees and stopped accepting new orders.
Customers were contacted by company administrators Keith Crawford, Matthew Caddy and Damien Pasfield, with a memo seen by Daily Mail Australia.
“Any outstanding orders placed prior to the appointment of the administrators will not be honoured,” said the note, signed by Mr Pasfield.
‘You will need to file a proof of debt form to make a claim as an unsecured creditor to the administration.’
The note also warns that customers cannot get a refund, stating: ‘The value of orders placed prior to the administrators’ appointment represents an unsecured claim against Booktopia.’
Anyone with Booktopia store credits or gift cards will also be out of luck, as admins say: “The use of store credits and/or gift cards has been suspended until further notice.”
Booktopia, once Australia’s largest bookstore, is in chaos, with customers being told their pending orders will not be fulfilled and they will not receive a refund.
The company filed for voluntary bankruptcy on July 3, just weeks after announcing that it needed to cut 50 jobs to save $6 million. Warehouse pictured
And customers who are owed a refund will likely have to wait a long time to receive it, if they ever get their money back.
“Administrators/Booktopia will not process refunds,” Pasfield wrote.
Payments owed to Booktopia’s customers, suppliers and other creditors “depend on the outcome of the sale and/or recapitalization process and the realization of other assets.”
Mr Pasfield said whether or not a return to unsecured creditors would be likely would be outlined in a report by the administrators to be issued before a second creditors’ meeting.
That date has not yet been set, but a first meeting is scheduled for Monday, July 15.
Those owed money by Booktopia have been told they “should form their own opinion on whether or not to attend the meeting (in person or through a representative).”
‘Regardless of whether you decide to attend or not, your claim will not be affected.’
Booktopia suspended trading in its shares in June, before an update was issued to shareholders and the Australian Securities Exchange.
“Further announcements will be made in due course,” a Booktopia spokesperson told Daily Mail Australia at the time.
It had been losing huge amounts of money since physical stores reopened at the end of the pandemic, including a $16.7 million loss during the six months to Dec. 31.
Chief Executive David Nenke stepped down in June after less than a year on the job and was replaced by company co-founder and former CEO Tony Nash.
Booktopia’s chief financial officer and other top executives have also resigned in recent months, and its chief marketing officer left last year.
Mr Pasfield, Mr Crawford and Mr Caddy, who are working with administrators McGrathNicol, have reportedly made all but 18 people redundant from the company as it winds down operations.
The decision to do so came a week after administrators took over, saying they saw no chance of the company negotiating its way out of trouble.
When I try to place an order, I get an error message that says “Payment gateway under maintenance. Please try again later.”
“Our immediate goal is to conduct an assessment of Booktopia’s assets and work with employees, vendors and customers to ensure the best outcome for all parties,” Crawford said.
The administrators have received 60 expressions of interest in their quest to sell or restructure the business.
Booktopia’s sales surged during pandemic lockdowns as customers were unable to visit physical stores and people stuck at home looked for something to occupy their time.
Its turnover in the 2020-2021 financial year was $223.9 million, rising again to $240.8 million the following year.
Booktopia sales surged during pandemic lockdowns, with people stuck at home and looking for something to occupy their time (file image)
But its revenue fell sharply as lockdowns ended and people cut back on spending as the cost-of-living crisis intensified, raising questions about the company’s future.
One customer told Daily Mail Australia that he had been using Booktopia for almost a year, but hadn’t found it to be a particularly good service.
‘The main thing I noticed about them as a book retailer is that, despite the excessive size of their warehouse, they never actually had any of the books I was looking for stocked on-site.
“Basically, every book I ordered had to come from their supplier first. The books they had in stock were boring in appearance and sound,” he said.