The administrators of failed book retail company RedGroup Retail have announced it will shut 38 stores in the next few weeks as it seeks to stem the losses from the ailing group.
The closures – 37 Angus & Robertson stores will shut across Australia, while one Borders store in New South Wales will close – will see more than 300 staff lose their jobs.
Borders’ remaining 200-strong workforce is now likely to face an anxious wait.
While administrator Steve Sherman is yet to reveal whether more store closures are on the cards, if he is unable to find a buyer or white knight for the chain he may be forced into more shutdowns.
The bulk of the stores to be shut are in Victoria (15 Angus and Robertson stores) and NSW (11 A&R stores and one Borders shop).
Franchised Angus & Robertson stores are not in administration and so are not under threat of closure. Most order stock directly from suppliers and so are independent from the financial structure of RedGroup Retail.
However, franchisees will be anxious to know whether the Angus & Robertson brand can be saved or whether they will need to consider other options – such as becoming independent stores or joining another franchise chain – to stay alive.
Sherman said in a statement that the store closures were necessary to save the wider business.
“These stores were the least viable of the 260 RedGroup retail outlets and needed to be closed in order to protect as best as possible the future of the business. As administrators, we need to make these difficult decisions in order to give people at the remaining stores their best chance at a long-term future.”
One upside from the closures is that they will help clear out the very crowded book store market.
Peter Strong, executive chairman of the Council of Small Business of Australia and owner of Smiths Alternative Bookshop in Canberra, believes there is still plenty of room for smaller, independent stores to respond the challenge of online retailing a weak consumer confidence.
“We believe there is enough demand. We just need to work out how many operators will be able to survive in the marketplace. We’re all on a trip of discovery at the moment,” he says.
“A lot of the independent booksellers are quite excited about it. Small businesses can respond quite quickly to consumer trends, which is exciting not only for the business but for the consumer.”
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
