German distributor KNV files for insolvency

The upheaval in the German book industry is continuing with wholesaler KNV Gruppe filing for insolvency yesterday (Thursday 14th February). The move didn’t come out of the blue: for months speculation has been rife that the Stuttgart-based company was heavily losing money and heading into financial crisis. Expectations are that the insolvency administrator will keep the business open while looking for a buyer.

During the day it emerged that Germany’s largest wholesaler and distributor had been in talks with an outside investor for some time. According to managing partner Oliver Voerster, whose family has run KNV for six generations, these advanced discussions fell through “unexpectedly” on Wednesday night “shortly before an agreement could be reached.” The KNV board was under additional pressure because a syndicated finance solution which was set up in 2015 for an undisclosed amount, expired at the end of December.

It is an open secret that KNV’s current problems are closely related to the most ambitious project the company had shouldered in its 185-year-old history, the state-of-the-art logistics centre which opened in Erfurt in eastern Germany in October 2014. Covering 170,000 square metres and costing €150m, the warehouse has been plagued by problems on and off ever since.

Because Germany has grown into an important export market for trade and academic publishers in the UK, events in Stuttgart will be closely watched. Gardners has built close ties with KNV, extending its cooperation with the wholesaler in 2015 to include express delivery of 400,000 English-language titles into the German-speaking markets. For now Aidan Lunn, head of international business developments at Gardners, has adopted a wait-and-see attitude. “Clearly this is an evolving situation at KNV, and not something we would want to comment on at this point,” he said.

KNV stocks more than 590,000 titles from over 5,000 publishers as well as 54,000 foreign-language books and 1.3 million German and foreign-language e-books. It delivers daily to 4,200 bookstores in Germany, plus another 800 in Austria and Switzerland.