Booktopia, once Australia’s largest bookseller, is in chaos, with customers being told their outstanding orders will not be fulfilled and they will not receive refunds.
The company filed for bankruptcy on July 3, just weeks after it announced it would cut 50 jobs to save $6 million.
On Wednesday it was announced that Booktopia has laid off another 165 employees and is no longer accepting new orders.
Customers have been contacted by the company’s directors Keith Crawford, Matthew Caddy and Damien Pasfield with a message seen by Daily Mail Australia.
“Outstanding orders placed prior to the appointment of the administrators will not be executed,” the memo, signed by Mr Pasfield, said.
‘You must file proof of debt to file a claim as an unprotected creditor with the board.’
The letter also warns that customers will not be able to get a refund. It says: ‘The value of orders placed prior to the appointment of the administrators represents an unencumbered claim against Booktopia.’
People with Booktopia credit or gift cards are also out of luck. The administrators report: ‘The use of credit cards and/or gift cards has been suspended until further notice.’
Booktopia, once Australia’s largest bookseller, is in chaos, with customers being told their outstanding orders will not be processed and they will not receive refunds.
The company went into voluntary bankruptcy protection on July 3, just weeks after it announced it would cut 50 jobs to save $6 million. Warehouse pictured
And customers who are entitled to a refund will likely have to wait a long time for it, if they get their money back at all.
“The administrators/Booktopia will not process refunds,” Mr. Pasfield wrote.
Payments due to Booktopia’s customers, suppliers and other creditors are ‘subject to the outcome of the sale and/or recapitalization process and the realization of other assets’.
Mr Pasfield said the likelihood of a return to unprotected creditors would be set out in a report from the administrators, which will be issued before a second meeting of creditors.
The date has not yet been set, but an initial meeting is scheduled for Monday, July 15.
Those owed money by Booktopia have been told to ‘form their own judgment as to whether or not to attend the meeting (either in person or through proxy).
‘Whether you show up or not, your claim will not be affected.’
Booktopia ceased trading in June before providing an update to shareholders and the Australian Securities Exchange.
“Further announcements will be made in due course,” a Booktopia spokesperson told Daily Mail Australia at the time.
Since reopening physical stores at the end of the pandemic, the company has suffered huge losses, including a $16.7 million loss for the six months ended Dec. 31.
CEO David Nenke stepped down in June after less than a year on the job, replaced by co-founder and former CEO Tony Nash.
Booktopia’s CFO and other executives have also stepped down in recent months, and last year the marketing director also left.
Mr Pasfield, Mr Crawford and Mr Caddy, who work with administrator McGrathNicol, have reportedly laid off all but 18 employees at the company as it winds down its operations.
The decision to do this was made within a week of the administrators taking over, who indicated that they saw no chance of the company getting out of its troubles through trading.
When you try to place an order, the error message ‘Payment gateway under maintenance, please try again later’ appears.
“Our first priority is to conduct a review of Booktopia’s assets and work with employees, suppliers and customers to achieve the best outcome for all parties,” Mr Crawford said.
The administrators have received 60 expressions of interest in their request to sell or restructure the company.
Booktopia’s sales skyrocketed during the pandemic lockdowns, as customers were unable to visit physical stores and people stuck at home looked for something to occupy their time.
Revenue in the 2020-2021 fiscal year was $223.9 million, rising again to $240.8 million the following year.
Booktopia sales soared during the pandemic lockdowns, as people were stuck at home and looking for something to fill their time (stock image)
But revenues plummeted as lockdowns were lifted and people cut back on spending due to rising living costs, raising doubts about the future of the business.
One customer told Daily Mail Australia that he had been using Booktopia for almost a year but did not find the service particularly good.
‘What struck me most as a bookseller is that, despite the enormous size of their warehouse, they never actually had the books I was looking for in stock.
“So basically every book I ordered had to come from their supplier first. The books they actually had in stock looked and sounded boring,” they said.