DigiDirect owner buys Booktopia from administration — but don’t expect an Australian Amazon
Booktopia and digiDirect will share expertise and fulfilment resources but operate as fundamentally separate entities, said new CEO Shant Kradjian.
The owner and founder of tech retailer digiDirect has purchased book marketplace Booktopia out of administration, but says there are no plans to copy Amazon by combining both businesses under one giant e-commerce brand.
On Monday afternoon, insolvency and restructuring practice McGrathNicol announced digiDirect founder and owner Shant Kradjian had acquired the Booktopia business for an undisclosed sum.
Booktopia entered voluntary administration on July 3 this year, after tallying losses of $16.7 million in the half-year to December 31.
The company said sales had fallen from their pandemic-era peak, and that efforts to develop a state-of-the-art fulfilment centre in Sydney had reduced its operating efficiency.
The new deal means Booktopia will continue trading, maintain the employment of all existing employees, and employ as many as 100 new hires to bring operations back up to speed while supporting its trade creditors.
Kradjian now serves as CEO of the revamped Booktopia venture.
“We want to get it back and as strong as ever before,” Kradjian told SmartCompany on Tuesday.
Kradjian says publishers are “very supportive” of Booktopia’s second life, and the new-look Booktopia wants to “work closely with authors, publishers, and especially customers”.
“So we need to gain their trust again. We ask them, hopefully, to trust us.”
Kradjian founded digiDirect in 2006 at the age of 19 and says the core offerings of the two businesses are not as different as they might first seem.
“The fundamentals are the same marketing perspective,” he says.
“So we think we can do a good job with that experience that we have.”
Haig Kayserian, general manager of digiDirect, agrees Kradjian’s expertise in technology e-commerce will translate to the book-selling venture.
“At the end of the day, e-commerce, it’s about buying a product, marketing that product, selling it, and then fulfilling it,” Kayserian told SmartCompany.
“In that sense, they’re similar businesses.
“It’s just that one product has paper and the other one has batteries.”
“I don’t want to compare ourselves to anyone”: Kradjian
Booktopia’s legacy as one of Australia’s largest booksellers, and the nation’s appetite for the written word, are not the only factors that interested prospective buyers.
The venture’s fulfilment centre, billed as one of the most advanced and heavily automated centres in Australia, will eventually become home to digiDirect’s own operations.
“The businesses will run separately,” says Kayserian, who is not directly involved in Booktopia’s operations.
“But ultimately, they will find those mutual benefits in order to trade more efficiently, and our goal is to benefit digiDirect customers and Booktopia customers through this acquisition.”
The new fulfilment centre will see digiDirect orders prepared for couriers at a “record speed”, he adds.
Of course, sharing logistical resources to sell books and consumer technology has been done before, most notably by Amazon, which grew from an online bookseller to a global retail powerhouse.
DigiDirect also launched its own third-party marketplace in February, expanding its consumer offerings in a way that is comparable to Amazon’s own marketplace model.
But Kradjian is clear: there are no plans to fully merge both brands under one corporate umbrella to create a defacto Australian Amazon.
“Well, I don’t want to compare ourselves to anyone,” says Kradjian, when asked directly about Amazon.
“Booktopia, the idea is that it sells books. We want to keep it as Booktopia, so the digiDirect business isn’t merging, its product lines are different to Booktopia.
“It will stay as it was: its focus is to sell books, there’s no intention to sell a wider range of products.”
The Booktopia team is now focused on hiring staff and rebuilding its stock levels, with an eye to soft launch its renewed website in the next week.
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