Angus & Robertson Bookstores – in voluntary administration

A lot of surprise has been expressed about the demise of A & R bookstores and by association, Australian Borders bookshops (also owned by REDgroup retail).  Voluntary administration is the slippery slope to bankruptcy.

I’m actually surprised they didn’t go broke a few years ago – to me that’s the astonishing part.   And I was mourning the demise of A & R when they ceased publishing (great Australian books) and were bought out by an overseas investment company.

Blame has been sheeted home variously to the increase in online book purchases, E-books, the GFC, parallel importation laws, the higher price of books in Australia etc etc.

However the bankruptcy of A & R boils down to one thing.  Appallingly bad business management (from the top).  Selling what they wanted to sell and how they wanted to sell it, rather than selling what the average Australian customer wanted and providing good service.  For example, stocking a huge percentage of books written by overseas authors (instead of locally produced books), and a huge percentage of stock being best sellers – not necessarily in Australia –  i.e. cheap books to buy in and whack a massive margin on (instead of stocking a wide variety and assisting book lovers to purchase specific titles, and speedily).

It’s easy to blame increasing online sales for the fall in retail sales in recent months, as Gerry Harvey and others did not long ago.  But in reality, it’s the superb service and provision of better quality information on items for sale by online sellers that is taking business away from traditional shopfronts.   Because however time-poor most Australians think they are, many treat shopping as recreation, not an onerous activity.  And the vast majority of people would much prefer to walk into a shop and handle goods before buying.  When it comes to books it’s certainly true that most buyers prefer to walk up to the shelf, lift off books and have a flick through (a quick look at any images and reading a line or two from different parts of the book) – feeling the weight of the book and assessing (unconsciously or otherwise) the quality of it – before handing over their hard-earned money.   Bookbuyers are buying online because they either can’t get the books they want from conventional bookshops or the price is very much cheaper online.

A & R began as a fabulous Australian publishing company and ended as a business taken over by a pack of money-hungry investors.  Like any business, if it’s run by people who don’t love the specific business they are in and who are only in it for the money, then it will show up one way or another.

Everyone seems to have forgotten the furore several years ago caused by the A & R demand to publishers to pay for shelf space.  It’s the best public illustration of business managers absolutely clueless about good business management.  Any smart retail business manager knows success is dependent on a healthy, happy partnership between the producer and the seller – there must be enough profit on both sides for everyone to stay in business (and eat).  A & R made enemies of the publishers who supplied them with stock to sell by insisting on one-sided business arrangements, capped off by their astonishingly greedy demand for shelf space fees a few years ago.  Any remaining illusions book publishers had been under, regarding the goodwill A & R management had towards them, evaporated overnight. 

What is not of course known is the other bad business practices.  These are a few I have personally encountered when dealing with A & R over more than 5 years:  a policy of stocking almost no  books produced by authors living in the local area unless they were sold in all other A & R stores; stocking self-published books only if they could squeeze on to the tiny  ‘local’ list or if they had already become best-sellers; head office refusal to even bother answering requests to be included in sales catalogues (for a good fee, of course); standard supplier payment terms of 60-90 days after the end of the month, and quite often closer to 120 days; the necessity for publishers chasing A & R payments to have to ring overseas, and at overseas business opening hours; adding an extra amount onto the publisher’s recommended retail price (although the wholesale price is a percentage based on the RRP) and not even informing the publisher….the list goes on.  In short A & R management have treated suppliers like dispensable cash cows and customers like idiots who should be prepared to fork out their hard earned cash for whatever it suited A & R to sit on their shelves.  And now A & R/REDgroup retail are bleating they’ve gone leg up and looking around for others to blame.

The demise of A & R is a good thing for the Australian publishing industry – it has cleared the field of dead wood and will assist the many independent booksellers to flourish.  A & R have been taking the cream off the top by stocking a relatively narrow range of the top-selling imported books (easier), rather than a wide range (to suit the customers).   I deal with bookselling businesses from Townsville to Darwin, Broome, Perth and Melbourne and all points inbetween.  Some are completely independent while many others belong to a buying group.  Almost all the booksellers I deal with are booklovers and good business managers.  We consider one another allies and are genuinely pleased to see one another do well.

I feel very sorry for the book loving staff amongst the A & R employees, including the manager of the A & R bookshops here in Townsville, who has been fabulous to deal with over the last 5 years.   Many have expressed exasperation over the years because there has been improvements they would like to have made but they have not been allowed to.  I am confident these people will do well if they take on an independent bookselling business themselves.

In the meantime, I would encourage booklovers to resist the urge to buy magazines and books from the chainstores such as Big W, Target and K Mart.  These retailers are cherrypicking a tiny number of the top selling titles and slashing the retail price to bottom-drawer through massive buying power, in the same way that Woolworths and Coles cherrypick top draw pharmaceutical lines and leave pharmacies to sell everything else.  Many members of the public are bleating about the high costs of some items in speciality shops, not realising it costs a lot more to stock a wide range of slow-selling items than a narrow range of top sellers.

Down the bottom of the pile is the producers of the goods for sale in bookshops – authors.  Australians need reminding that most authors receive something like a pitiful 1% of RRP and that a large print run is around 10,000 in Australia.  Months or years of work is poured into writing a book yet authors receive a fraction of what is the average annual income for an Australian.