The administrators handling the collapse of Booktopia have announced that orders placed with Australia’s largest online bookseller will not be filled – and there may be no refunds either.
It means out of pocket customers who placed orders prior to the company entering voluntary administration have now become, in effect, unsecured creditors – which voids store credits and gift cards too.
This week all trading ceased on the Booktopia site, with administrator Damien Pasfield from McGrathNicol Restructuring informing customers they must lodge a proof of debt form to make a claim.
The Booktopia Group and its associated entities Booktopia, Making I. T. Better, and Virtual Lifestyles, were declared insolvent and went into voluntary administration on 3 July, two weeks after the company suspended all share trading.
The ASX-listed company’s net loss between July and December was $16.7m, with net liabilities of more than $20m.
“The Administrators are undertaking an urgent assessment of Booktopia’s financial position, whilst pursuing options for completing a recapitalisation of Booktopia or a sale of its business or its assets,” the administrator said in a circular to customers.
“The recapitalisation / sale process will operate within a compressed timeline to minimise business disruption.”
The payment of all unsecured claims, including customers, will be dependent on the outcome of that sale or recapitalisation, and realisations from other assets, the administrators added.
Previous media reports have named Dymocks, Brisbane-based QBD Books and online retailer Kogan.com as potential buyers.
Booktopia posted record profits during the Covid pandemic, and by 2021 had outstripped Amazon in market share of the Australian online book sector.
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The company re-invested profits in expanding and modernising its warehouse, but the increased cost of living, more online competition and a volatile market brought a post-Covid downturn, according to Booktopia’s chairman, Peter George.
Over the past year, the company has shed about 100 jobs, which was expected to save the company more than $6m.
The first creditors meeting will be held on 15 July.
