Connect Books put up for sale

Connect Books has been put up for sale by its parent company with a holding value of £15m.

The group aims to find a buyer and sell the business arm, which includes wholesaler Bertrams, Dawson Books academic library supply arm and e-commerce retailer Wordery, within 12 months.

The decision follows a strategic review of the Connect Group, during which the books arm was determined “no longer core to the group’s future direction”, according to a note in the firm’s financial results for the year ending 31st August 2017, released today (26th October).

“Connect Books remains a leading player in its markets with strengths and prospects that are not dependent on ownership by the group,” the statement said. “We are currently taking steps to find a purchaser who can provide the necessary focus and investment to take the business forward, and expect to conclude a disposal in the next twelve months. Meanwhile, we are grateful for the continued efforts and professionalism of colleagues in the business.”

Connect Books' annual sales were up 13% to £221.3m year-on-year, with a strong performance in its Bertrams wholesale arm with revenue up 18.6% to £108m, while Wordery saw sales shoot up 20.9% to £59.7m.

Both the company’s UK and international library businesses suffered though, with domestic sales down 7.2% and export sales down 7.7% in euros, which the firm blamed on “more challenging conditions impacted by the combination of Brexit, which has created inevitable uncertainty in the higher education sector, and volatile exchange rates, and ongoing austerity challenges especially in the public library sector”.  

Connect Books managing director Justin Adams was keen to allay fears of any disruption to the company's every day operations, saying it would be“ very much business as usual” for the books division as it “investigated the various options for a sale”.

“We have increasingly operated as a standalone division within Connect Group as it has sought to refocus on becoming a leading specialist distribution business,” he told The Bookseller. “ Therefore it will be very much business as usual as we investigate the various options for a sale.  In the meantime we will continue to focus on serving our customers and publishers through continued improvements in the breadth and depth of our offer, and targeted investment to support this and the most cost efficient supply chain possible”.

He added that the firm had continued to post strong growth in revenue and delivered tangible improvements in service, availability and customer support despite a backdrop of challenging market conditions. 

“The business continues to proactively invest and adjust its offer and operations to win new business, grow our share of the market and mitigate the significant cost pressures exerted by challenges such as the National Living Wage, exchange rate volatility and transport cost rises,” he added.

Smiths News Plc bought Bertrams in 2009 for £8.6m and has since expanded its remit, buying Dawson Books  in 2011 and launching e-commerce website Wordery in 2012 as a joint venture with former Book Depository finance director Will Jones.

In 2015, the company bought out the remaining 49% stake from Jones and the remaining Wordery directors to wholly-own the business. Sales on the platform, which offers shipping around the world, rapidly took off and stood at £31.8m in April.