Bertrams administrators claim change in Amazon purchasing contributed to demise

A statement from Bertrams adminstrators, published on Companies House, has outlined some of the reasons why the wholesaler collapsed, claiming the “aggressive practices” of Amazon and the collapse of The Book People contributed to the company's demise. 

Joint administrators Martin Armstrong and Andrew Bailey of Turpin Baker Armstrong stated: “Book wholesalers have suffered from demand in recent years due to changes in the distribution model for literature, and the rising popularity of e-books. Further, the Group began experiencing increased financial difficulties in September/October 2019 when Amazon began purchasing from publishers directly instead of buying from distributors.

“In February 2020 there was continued pressure imposed on the group by the aggressive practices of certain competitors such as Amazon, which involved bypassing the Group’s business in the supply chain.”

In addition, Bertrams lost close to £960,000 when The Book People entered administration in December last year, the document states.

In April 2020, the company was issued with a statutory demand from supplier Hachette UK in respect of a debt of nearly £3m, it discloses. 

There were plans to market and sell the wholesaler's subsidiary companies in the spring of this year, to reduce costs. Despite Erasmus, Houtschild and Wordery ultimately being sold in March 2020 and April 2020 respectively, the group's reduction plan was "unable to be fully implemented", as business had "deteriorated rapidly due to a large quantity of orders being cancelled" because of Covid-19. 

The report has also revealed there were “approximately 23 interested parties, including Australian and American entities” who registered interest in acquiring the business and assets of the company. 

Currently, Bertrams has a 12-month maximum duration for administration, unless the period is extended by court order, or the creditors. 

The document also details the wave of redundancies made this summer, with 323 staff made redundant on 19th June and 49 retained to assist in the warehouse, IT department and credit control administration. A further 31 staff were made redundant on 3rd July, with all remaining employees let got by 31st July. 

Assets from the stricken business were acquired by Gardners parent company The Little Group in July. A recent statement of affairs found Bertrams owed 2,500 creditors a combined total of £25m.