New details emerge on the RedGroup collapse

The administrators of RedGroup Retail held the first creditors' meetings in Melbourne and Auckland yesterday, and it does not look good.RedGroup owe some some $7.8 million AUD in salary and entitlements to their 3600 employees in Australia and New Zealand. Publishers and other suppliers are owed $44 million, and RedGroup also owe themselves  $118 million. That last is the only secured debt, which means that it will be the first to be paid off.

Perhaps I should explain. RedGroup are owned by the private equity group PEP, who built RedGroup by buying several Australian and New Zealand bookstore chains. PEP then saddled RedGroup with the debt of buying the chains.

The 231 company-owned stores of the group--115 Angus & Robertson, 67 Whitcoulls, 31 Borders, nine Bennett's and nine NZ travel stores in airports--have stock on hand worth approximately $120 million. Unredeemed gift vouchers from all stores are believed to be worth some $15 million.

So basically PEP threw in the towel just before a bankruptcy would cost PEP money. Basically the company is dead, and everyone but PEP got screwed.

Also, Kobo will be losing their retail presence down under, which is going to hurt.

via Bookseller & Publisher

About Nate Hoffelder (11211 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader:"I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

2 Comments on New details emerge on the RedGroup collapse

  1. What makes you say Kobo will go? From what I understand, both A&R & Borders websites will continue trading. I can find no reference to Kobo being discontinued.

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