Online retailer Booktopia has been placed in voluntary administration less than four years after listing on the ASX.
Shares in the Booktopia Group (ASX:BKG) had been suspended since mid-June after admitting the business had liquidity issues and sought funding for redundancies and working capital.
McGrathNicol restructuring partners Keith Crawford, Matthew Caddy, and Damien Pasfield were appointed voluntary administrators of Booktopia and three subsidiaries on Wednesday, July 3.
The administrators are undertaking an urgent assessment of Booktopia’s business while options for its sale and/or recapitalisation are explored. Trade in company’s shares will remain suspended during the process.
McGrathNicol appealed to anyone interested in recapitalising and/or acquiring Booktopia or any of its assets to contact the administrators via email at booktopiaenquiries@mcgrathnicol.com.
A first meeting of creditors will be held on Monday, July 15
The 20-year-old business, founded in 2004 on the same day as Facebook, went public in December 2020, raising $43.1 million at $2.30 for a market capitalisation of $315.8 million.
Its first year as a public company was a success as Booktopia’s sales and profits grew dramatically.
But the wheels fell off soon after amid a battle between cofounder Tony Nash and the board for control of the business as economic headwinds grew. He was ousted as CEO in early 2022, then as the share price lost 90% of its IPO value, several board members departed.
Challenges remained, and conditions worsened in the first-half of FY24 to December 2023, with results falling well below forecast expectations just as the business invested heavily in scaling up its infrastructure.
Revenue dropped 22% $86.3 million, with units shipped also down 21% from H1 FY23 to 3.1 million. The company put the blame on its new $12 million customer fulfilment centre (CFC) in Sydney, which impacted sales due to lower inventory levels and longer delivery times, alongside a cut in marketing to reduce demand to support the transition. The NPAT loss was $16.7m, down $12.8m on the prior comparative period and a statutory EBITDA loss of -$4.6m, down $5.9m on the PCP.
A strategic review of the business followed. By mid-May, the company’s Chief Financial Officer, Fiona Levens, had resigned. CEO David Nenke followed soon after.
Nash returned to the executive fold and board last month to run sales. Within a fortnight the company’s shares were suspended from trade. On June 21 the business told the ASX the trading halt would continue as Booktopia “is not yet in a position where it is capable of making an announcement around the outcome of its strategic review including that of seeking additional funding”.
Booktopia shares were worth $0.045 cents at the time, leaving the business once worth nearly $400 million a market cap of just over $10 million.
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