Trade dismay at The Book People administration amid hopes of buyer

News of The Book People going into administration has been met with dismay by publishers, who still hold out hope that a buyer for at least part of the business can be found.

The online retailer, which employs around 400 people, has appointed Toby Underwood and Zelf Hussain from PricewaterhouseCoopers following a "difficult trading environment that the business has been experiencing, combined with increasing working capital pressures". PwC said there would be no immediate job losses, and Christmas orders already placed would be fulfilled.

Endless, the firm’s owner, had reportedly been trying to find a buyer in recent weeks. Publishers expressed sadness at the news of The Book People’s demise, amid concerns about unpaid bills on stock.

Hilary Murray Hill, c.e.o. of Hachette Children’s Group—which has partnered with The Book People on multiple occasions, including on the promotion of its Enid Blyton publishing and the sale of a joke book by Dermot O’Leary to raise funds for Save the Children—said the retailer played a "significant role" reaching younger readers.

"We were saddened to hear the news about The Book People," Murray Hill told The Bookseller. "It plays a significant role in reaching young readers across the country with its work in communities and schools, and is a key player in creating and maintaining the evergreen children’s book brands. Clearly we, and other UK children’s book publishers, will be hoping for a positive outcome."

Polly Powell, chair of Pavilion and advisor to Quarto, said the firms she represents only had “limited exposure” to the administration, but went on: “I think it’s a really sad day. I was there when it presented a few months ago its turnaround plans, which included extensive TV advertising. I’m just really sorry that its plans didn’t come to fruition before time ran out.”

She added: “I suspect that someone will buy at least part of the business. The children’s operation is a very good one, and I just hope something comes out of the mix.”

At Pan Macmillan, m.d. Anthony Forbes Watson said the publisher “looked forward to working with the administrator on addressing the outstanding issues.” He said: "The Book People has been a valued partner through thick and thin over many years in bringing books to new readers, and we’re sad to hear this news. If no solution is found, this will bring an unwelcome reduction in the diversity of the retail landscape."

Nick Wells, publisher and founder of Flame Tree Publishing, which publishes art calendars, luxury notebooks and illustrated books, suggested the retailer’s model had come under threat from both the supply market shifting to online and a resurgent, personalised indie sector.

He said: “The Book People has been squeezed, unable to order the very high quantities of the glory days when heavily discounted sales made sense for publishers in need of subsidising the uncertainty in the high street. All publishers know that to survive we have to work hard to engage with our consumers on all fronts, wherever they wish to purchase; keep innovating, on and offline; sell worldwide; and put the love for books and the power they offer at the front of our thoughts. Above all, it's a sad day for all those employed by The Book People." 

However, due to the impact of high discounting and special sales on author earnings, Nicola Morgan, a children's author who advocates for the rights of readers and authors, and is a former chair of the Society of Authors' Children's Writers and Illustrators Group, said she had mixed feelings about the news.

“I am really sorry to hear of a book-related company going under, and understand that cash-strapped schools will miss the chance to buy cheapened books," she said, "but many children's authors, in particular, suffer at the hands of slashed-price book deals and most of us are already very low earners. We can earn as little as 2p or less per sale. Small bookshops have also lost out, as they can't command anything like these vast discounts. And too often cheap books are bought not by people on low incomes, but higher-earning families who can afford the already relatively low prices of books in the UK." 

Turon Miah, insolvency lawyer and principal associate at law firm Gowling WLG, told The Bookseller:  "As the festive shopping season draws to a close, the winners and losers quickly become apparent. Businesses such as The Book People which didn’t see the expected sales will be pushed into financial difficulties.

“The good news is that for now the administration of The Book People appears to be a trading administration, suggesting the underlying business of the online retailer may be profitable and of interest to buyers. The world of online retail is dynamic and fast-paced, and only those that can adapt quickly to changing consumer trends succeed. The administrator’s proposals should be published in eight weeks and will shed light on the reasons for the financial woes of the business."

Administrator Underwood, restructuring partner at PwC, said yesterday: “I can confirm that the business continues to trade and at this point in time no redundancies are currently envisaged while we rapidly explore a sale of the business. The intention is to fulfil and deliver all customer orders received and accepted.  

"I appreciate the obvious concerns that staff in particular will have as we move towards Christmas. While the administrators have funding to meet the payroll for December, the longer-term prospects for the business, staff, customers and suppliers will clearly be dependent upon whether a sale can be secured.”

The Book People website remains live, and an e-mail newsletter was sent on Tuesday morning (17th December), advertising its "biggest ever winter sale".

When asked if orders placed yesterday would be honoured, PwC said: "At this stage, it's difficult to say. All we know is that we're committed to any existing orders and [ensuring] that they are dispatched. There will be no redundancies in the short-term while a purchase is sought."