“The combination of weak retail trading figures coming up to Christmas and the collapse of ‘over the counter text book’ sales by over 40 per cent from last year, has left the board with no alternative but to appoint a voluntary administrator to help this proud organisation through this period of time,” Mr Merhi said.
Former Macquarie University vice-chancellor Dianne Yerbury, another director, described administration as a “difficult but necessary decision”.
Administrator Phil Carter said there were still hopes the company, which has more than 180 staff, over 300 suppliers and doubles as Australia’s largest co-operative with a self-reported 2 million active members, could be sold.
“We intend to keep all Co-op bookshop and Curious Planet stores operating on a business as usual basis while we seek interested parties for the sale of the business on a going concern basis,” he said, adding that several buyers had been in contact since the company entered voluntary administration.
Curious Planet was described as an “iconic” Australian business with a strong subscriber base and omni channel retail strategy in flyers sent to prospective buyers two weeks ago.
But internal documents painted a weaker picture, with suppliers owed $12.6 million at the beginning of November, of which $8.8 million was owed for stock delivered and services rendered at least 90 days prior.
One supplier, textbook publisher John Wiley & Sons, was owed more than $1 million, and 26 suppliers were owed more than $100,000 each.
The University of Western Australia and the Sydney University Sport and Fitness Centre were owed six figures, as were Australia Post and wholesale toys giant Independence Studios.
Some suppliers said there had been payment issues since the Co-op bookshop bought Curious Planet – founded as Australian Geographic by Dick Smith in 1992 – from Myer Family Investments three years ago.
Mr Carter said there were “a lot more questions than answers” following his first day, confirming that investigating payments made to Jacaru Australia, a company majority-owned by the chief executive, was “one of the critical jobs of the administrators” over the next two weeks.
Unlike the Co-op bookshop’s other suppliers, Jacaru Australia did not appear to have trouble getting paid: at the beginning of November, it had received more than $857,000 in payments from the Co-op this year for $315,000 in delivered stock.
A spokesman for the board did not comment on questions regarding the board’s debt or Jacaru last week, saying both were “commercially confidential” matters.
Jeremy Nadel, a spokesman for the Take Back the Co-op campaign which aims to put students on the board of the bookseller, said “the Co-op will only return to being the successful textbook retailer that students and academics once loved, when it returns to being governed by its members”.
Max is a journalist at The Sydney Morning Herald and The Age.
Nick is a journalist for The Sydney Morning Herald.