Independent book distributor to close, as REDgroup collapse, online sales hit sector

In another blow to the book industry, one of Australia and New Zealand’s largest independent book distributors The Scribo Group is set to close, costing about 50 employees their jobs.

The closure comes after an “exhaustive strategic review of the Scribo business over the last six months” in which a sale, downsizing or a closure were considered, says Craig Davison, managing director of Scribo-owner Gordon and Gotch Australia.

“A number of factors have contributed to the erosion of the traditional route to market through physical distribution and we expect this to continue to accelerate in the short to medium term,” Davison says.

These include an increase in offshore online sales, the closure of REDgroup, and increased competition from international wholesalers on the back of the strong Australian dollar.

“These significant changes to market conditions have impacted the performance of The Scribo Group to the extent that the decision has been made to close to business.

“All publishers and retailers have been advised of this decision and trading with both sectors will be finalised over coming months.”

Collins managing director Daniel Jordon said this morning Scribo was an important player in the sector.

While some suggest Scribo’s distribution contracts will simply be picked up by other parties, questions remain as to why a buyer wasn’t found for the business.

Collins and Dymocks are named on Scribo’s website as national key accounts, as well Angus & Robertson, Borders, Myer, David Jones, ABC Shops, Whitcoulls, Newslink and Paper Plus in New Zealand.

REDgroup Retail, the owner of Angus & Robertson and Borders, collapsed in mid-February. Owned by Pacific Equity Partners, it was once Australia’s largest bookseller with an estimated 20% market share.

A buyer for Borders, which once numbered 25 Australian stores, was not found. There are now just 19 company-owned Angus & Robertson stores, plus a franchise network. Talks continue on the remaining assets.

Scribo was formed in February 2008 by the merger of four Australian book distribution companies: Tower Books, Bookwise International, Gary Allen Pty Ltd and Brumby Books & Music. It was later acquired by Gordon and Gotch, an independent magazine distributor owned by PMP Ltd.

According to its website, it represents more than 200 publishers in the Australian and New Zealand book trade, including Slattery Media Group, The Five Mile Press, Big Sky Publishing, Giramondo, Brolly Books, Rockpool Publishing, Sally Milner, Health Directions, Bloomings Books, Child’s Play, Hunter Publishers and Melbourne Books.

PMP said yesterday the ancillary business Brumby Books and Music would continue.

“The cost to close will be accounted for as a significant item albeit the increase in significant items will not materially increase from that previously disclosed,” it said.

Scribo managing director David Hogan was contacted this morning for comment.