Published Date:
13 February 2007
BOOKWORLD, the high street chain credited with revolutionising cut-price book selling, has been placed in administration blaming competition from the internet and the "Tesco effect".
Yesterday, 44 of the company's almost 400 staff were laid off as eight unprofitable stores, five of which are in Scotland, were immediately closed. A further 21 staff will be cut at the end of February as four stores, two of which are Scottish, begin closing down sales.
Bookworld, along with bw! and Bargain Books, are the trading names of the book selling empire built by David Flatman over the last 30 years.
Flatman started his business in Edinburgh in 1977 when he took a short-term lease on a Princes Street store, cycling the city with advertising hoarding in tow for cheap promotion.
From humble beginnings he grew the chain to 50, including 20 across Scotland, with turnover of around £30 million, selling older books at cut down prices.
Flatman once said the Harry Potter books were "more upmarket and intellectual" than his most popular ranges, typically popular fiction such as Danielle Steel or pictorial books and guidebooks.
However, despite an apparently successful format, the lower operating costs of internet-based rivals and the ever-widening product offerings at supermarkets, led to the company's financial position deteriorating over the past six years.
In the latest accounts available for the year to 31 March, David Flatman Limited made a narrowed pre-tax loss of £207,000, but retained net assets of almost £1 million.
Joint administrator Tom MacLennan from Tenon said there had been a considerable deterioration in the company's trading position since then, leading to a loss in the nine months to 31 December of "in excess of £1m" and an asset deficit, despite turnover of £28m in the period.
"The internet is not new, but margins have been affected by a combination of the internet and the Tesco effect over the past few years," he said.
However, MacLennan was adamant a "slimmed down" operation could be sold as a going concern and there had been strong interest in the chain. The stores which had been shut had not been viable, but some of the stores remained "highly profitable".
"You're looking at turnover of £28m in the nine months to December and the gross profits are fairly healthy, but the fixed costs of operating from some of the locations, particularly some of those that were locked into [on long- term leases] were just not viable," he said
"So the turnover is there, and we consider a slimmed down business to be viable."
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Last Updated:
13 February 2007 12:05 AM
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Source:
The Scotsman
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Location:
Edinburgh
