Red Group Retail, which own Borders’ Australian chain and Angus & Robertson, appointed Ferrier Hodgson as administrators yesterday.
It has been widely reported that private equity-owned Red Group made a net loss of $43.6m last financial year.
Red Group’s fall to the administrators followed news that Borders’ US parent company filed for Chapter 11 bankruptcy protection they day before. However, a statement on the Borders Australia website said: “Borders stores in Australia, New Zealand and Singapore are 100% owned by Red Group Retail and have no relationship or link with Borders stores in the US, other than a well recognised global brand.”
Ben Jolly, general manager of PMP’s book arm Griffin Press, said it would be some time before the printing industry felt the inevitable knock-on effects.
“We do have an indirect relationship with Red Group, so it all depends on how they are restructured on how big the impact will be,” he said.
“The books we produce are aimed at book resellers, but how much of our product goes onto the shelves at Borders and Angus & Robertson, I can’t say.”
Industry figures told ProPrint that rumours of problems at Red Group had been around for some time.
One printing industry source said: “They paid top dollar to buy the franchise and took out huge borrowings but it was badly run from the start.”
Maree McCaskill, chief executive of the Australian Publishers Association said Red Group’s troubles were due to the turbulent nature of the book industry.
“We are beginning to see some of the impact of the transition to e-books taking its toll on smaller, independent book stores as well as the larger chains,” she said
In its half-year results released yesterday, PMP announced a $19.2m write-down of it Scribo book distribution business, citing the shift to online retailers, growth of e-books and a decline in the number of new titles hitting the shelves.
Alan Fahy, chief executive of Australia’s largest book printer, McPhersons, said the government’s Book Industry Strategy Group (BISG) was an initiative to secure the industry’s future.
“There is a lot happening at the moment and that is where the BISG comes in, to assess what the future holds and what work needs to be done, and I am pleased to be a member of the group, which covers the whole supply chain.”
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