Booktopia, which had been Australia’s largest bookseller, is in chaos, with customers told their outstanding orders won’t be filled and they won’t get a refund.
The company went into voluntary administration on July 3, just weeks after it announced 50 jobs needed to be cut in order to save $6million.
On Wednesday, it emerged that Booktopia had sacked another 165 staff and stopped taking any new orders.
Customers have been contacted by the company’s administrators Keith Crawford, Matthew Caddy and Damien Pasfield with a message seen by Daily Mail Australia.
‘Outstanding orders placed prior to the appointment of the administrators will not be fulfilled,’ the note, signed by Mr Pasfield, said.
‘You will need to lodge a proof of debt form to make a claim as an unsecured creditor in the administration.’
The note also warns that customers can not get a refund, stating: ‘The value of the orders placed prior to the administrators’ appointment represent an unsecured claim against Booktopia.’
Anyone with Booktopia store credits or gift cards is also out of luck, with the administrators saying ‘The use of store credit and/or gift cards has been suspended until further notice.’
Booktopia, which had been Australia’s largest bookseller, is in chaos, with customers told their outstanding orders won’t be filled and they won’t get a refund
The company went into voluntary administration on July 3, just weeks after it announced 50 jobs needed to be cut in order to save $6million. Warehouse pictured
And customers who are owed refunds are likely to have a long wait for them, if they ever get their money back.
‘The administrators/Booktopia will not be processing refunds,’ Mr Pasfield wrote.
The payments owed to customers, suppliers and other Booktopia creditors are ‘dependent on the outcome of the sale and/or recapitalisation process and realisations from other assets’.
Mr Pasfield said the likelihood, or otherwise, of a return to unsecured creditors will be outlined in an administrators’ report which will be issued before a second meeting of creditors.
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 view about whether or not you attend the meeting (in person or via proxy).
‘Regardless of whether you decide to attend or not, your claim will not be affected.’
Booktopia halted share trading in June, before an update was issued to shareholders and the Australian Securities Exchange.
‘Further announcements will be made in due course,’ a Booktopia spokesman told Daily Mail Australia at the time.
It had been losing vast amounts of money since bricks-and-mortar stores re-opened at the end of the pandemic, including a $16.7million loss for the six months to December 31.
CEO David Nenke resigned in June after less than a year in the job, with company co-founder and its former chief executive Tony Nash replacing him.
Booktopia’s chief financial officer and other senior executives also resigned in recent months, and its chief marketing officer left last year.
Mr Pasfield, Mr Crawford and Mr Caddy, who work with from administrators McGrathNicol, have now reportedly sacked all but 18 people from the business as it winds down operations.
The decision to do so came within a week of the administrators taking over, indicating they saw no chance of the company trading its way out of trouble.
An error message saying ‘Payment Gateway Under Maintenance, Try again later’ comes up when trying to make an order.
‘Our immediate focus is to undertake an assessment of Booktopia’s assets and work alongside employees, suppliers, and customers to secure the best outcome for all parties,’ Mr Crawford said.
The administrators have received 60 expressions of interest in their quest to sell or restructure the business.
Booktopia’s sales surged during the pandemic lockdowns due to the inability of customers to visit actual stores, and people stuck at home were looking for something to occupy their time.
Its turnover in the 2020-2021 financial year was $223.9million, and then went up again to $240.8million the following year.
Booktopia’s sales surged during the pandemic lockdowns, with people stuck at home and looking for something to occupy their time (stock image)
But its revenue fell drastically as the lockdowns ended and people cut their spending as the cost of living crisis intensified, raising doubts about the company’s future.
One customer told Daily Mail Australia that they had been using Booktopia for almost a year, but had not found it to be a particularly good service.
‘The main thing that 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 location.
‘So basically, every book I ordered had to come from their supplier first. The books they actually had in stock were dull looking and dull sounding,’ they said.