The Booktopia saga: From epic beginnings to tougher plot twists

For years the Booktopia story read like an Australian e-commerce fairytale but events this week have threatened an abrupt ending for the online bookseller. 

On Wednesday the ASX-listed business confirmed it had called in voluntary administrators from McGrathNicol to undertake an urgent assessment of its operations and put its assets up for sale. 

It’s a horror plotline for the company, which has enjoyed stellar growth over the past two decades and managed to maintain a leading market position as an Australian-owned bookseller, even as e-commerce giant Amazon launched locally. 

But despite decades of expansion and soaring sales during COVID-19 lockdowns, the business has been under increasing financial pressure and its shares have dropped from a listing price of $2.30 to as low as $0.045. 

As potential suitors circle Booktopia, here’s a timeline of the company’s rise and fall. 

2004: Humble beginnings to stellar growth

When Tony Nash, his brother Simon, and brother-in-law Steve Traurig launched their online bookstore in 2004, they had a marketing budget of just $10 a day. 

The trio spent three days trying to sell their first book, but from there, momentum built quickly. 

The business saw 11 straight years of consistent year-on-year sales growth of between 30 and 40%. 

When Booktopia made its debut on SmartCompany’s Smart50 list in 2015, Tony Nash said the biggest issue was making sure its growth wasn’t too fast. 

“The most challenging part was to not grow too quickly. To make sure we could fulfill people’s orders over 99% of the time and improve on the 1% that were not fulfilled well,” he said.

Director of InsideOut PR Nicole Reaney says the business was a pioneer in Australia’s e-commerce landscape and became known as a go-to brand for books.

“It became the reliable and convenient bookstore concept,” she said.

As it grew, Booktopia found itself in the position to rescue some of its major competitors.

In 2015 it acquired online booksellers Bookworld and Angus & Robertson from Penguin Random House. 

In 2020 it scooped up another collapsed operator, purchasing university textbook business The Co-Op.

2017: Taking the fight to Amazon 

Amazon’s launch into Australia sent ripples of anxiety across the e-commerce sector, but Booktopia relished the challenge. 

While the US e-commerce giant was still finding its feet, Booktopia continued to invest in automation and grow its share of online book sales in Australia. 

According to its ASX prospectus, Booktopia held a 9.9% share of online consumer book sales in the 2017 financial year, which grew to a 14.8% share by 2020. 

Back in 2021, Nash told SmartCompany he believed Amazon had moved away from its focus on bookselling and now considered itself primarily a technology company. 

Booktopia, meanwhile, was focused on delivering great service in one category. 

“When you come to Booktopia, it’s about buying books. When you go to Amazon, it’s about buying everything,” he said. 

2020: The COVID rush and ASX listing 

The company had long had its eye on a share market listing and a COVID-fuelled boom in online shopping helped it realise these ambitions. 

During the 2020 financial year, Booktopia’s sales jumped by 28.8% to $165.8 million, laying the foundation for a $43.1 million bid to list on the ASX. 

In the months after the float, there was more good news.

In an update to shareholders in August 2021, Booktopia noted it had “smashed” its prospectus forecasts, with revenue up 35% for the year to $223.9 million.  

December 2021: ACCC action and surprise downgrade  

But by the end of 2021, Booktopia had some less rosy updates to share.

At the start of December, it confirmed the Australian Competition and Consumer Commission (ACCC) was taking it to court over statements in its returns policy that meant consumers had to notify the company within two days if they wanted to return a damaged or faulty item. 

The Federal Court later ordered Booktopia to pay a $6 million fine because of the return clauses, which fell foul of Australian consumer law. 

Then two days before Christmas in 2021, the company issued a trading update revealing it expected its earnings could drop by as much as 50% compared with the prior year. 

Management said that COVID outbreaks, bottlenecks in its warehouses, and set-up costs for a new distribution centre all hit the business hard. 

2022: CEO ousting and a sinking share price 

Further cracks appeared in the Booktopia growth story throughout 2022 and investors didn’t like what they saw. 

In February 2022, the company revealed a 49% drop in earnings and said it had made the decision to “forego sales and revenue” to focus on maintaining customer service. 

That July, Nash was pushed from his role as chief executive after the board of directors handed him notice to step down from the top job. 

Over the next 18 months, further updates revealed the company’s explosive growth path had stalled as consumer spending weakened post-pandemic. 

The business posted a $29 million loss for FY23, and a $16.7 million loss for the first six months of FY24. 

“Economic pressures impacting consumer spending [and] the increasingly competitive landscape and the volatility of the book market” were having a significant impact, the company told investors. 

Booktopia shares dropped from $1.32 in January 2022 to $0.045 in June 2024. 

2024: Administrators called in 

At the start of June, Booktopia revealed its chief executive David Nenke had resigned after less than a year in the job and that a further 50 jobs were on the chopping block. 

The business said it had made several decisions to reduce operating costs and had also rushed to secure $1 million in additional funding to help meet redundancy-related costs. 

Booktopia entered a trading halt on June 13. On July 3, it confirmed administrators from McGrathNicol had been appointed. 

Where to from here?

The administrators will spend the coming days canvassing potential buyers for Booktopia’s assets, including its website, stock and distribution sites. 

It’s understood there has already been strong interest, with bookseller Dymocks already telling The Age it would be keen to review the business.

Online retailer Kogan.com and bookseller QBD have also registered interest, according to the Australian Financial Review.

Booktopia’s website continues to operate throughout the administration, but customers who placed orders before administrators were appointed have taken to Booktopia’s social media accounts demanding updates.  

Reaney notes that if Booktopia finds a way to trade moving forward, a strong branding and communications strategy will be needed to keep consumers on board. 

“It will take time, but it does have strong existing brand equity that it can leverage to turn this experience around,” she said. 

A first creditors meeting will be held on July 15. 

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