What options do they have left?
One will engender continuing customer support and goodwill and will give you every chance of success if the business is viable or can return to profit.
The other will squander support and potentially turn creditors against directors in any crucial votes and decisions when they’ll need their support in future.
The Book People, one of the UK’s independent booksellers, have entered into a company administration while administrators look for a buyer to take the business on as a going concern.
What will help them in PR terms at least is that the administrators have promised that the company will continue to trade, that customers will receive all the books, gifts, toys and stationery they’ve ordered in time for Christmas and that there’ll be no redundancies in the short term.
The company was founded in 1998 to offer customers school and other books and items at discounted prices via a catalogue.
Administration buys valuable time
It was acquired by a private equity group called Endless in 2014 as part of a previous rescue deal and its latest filed accounts showed sales of £71.5m on over 17m books although profit was down to £1.1m from £6.2m. Debts also totalled £33m.
James Woolley, partner at Endless said they’d worked hard to secure the firm’s future and was disappointed not to have succeeded.
“The well-documented challenges in the retail environment, compounded by the strength of global online booksellers, has severely impacted operating cash flows over recent years.”
While Amazon and other online retailers have strongly impacted the sector, 70% of The Book People’s sales still came from online. They have previously had success with their model of going into schools or selling directly to people in their workplaces.
Administration not only effects the company in question but also impacts on their supply chain. Publishers Galley Beggar have launched an appeal for funds to help keep them going
For an otherwise viable company in difficult times, company administration can be the best way to recalibrate and revive a business.
If you think that your business could benefit from a breather then get in touch with us.
After a free consultation with one of our expert advisors, you will have a better idea about what realistic options you can enact to protect your company while you administer some running repairs and get ready to get back on the track, better than before!