Co-op Bookshop collapses into administration owing $15 million

The company behind iconic Australian retail brands Co-op Bookshop and Australian Geographic has collapsed owing millions of dollars.

The company behind iconic Australian retail brands Co-op Bookshop and Australian Geographic has gone into voluntary administration.

Co-op Bookshop still owes more than $15 million to toy sellers and publishers, The Sydney Morning Herald reports, with chairman Joe Merhi saying weak sales had left the board with no option but to bring in an administrator late on Sunday night.

“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 in a statement.

“The Co-op, founded in 1958 has a proud history of serving its members which now number close to two million Australians, but the massive decline in the purchase of textbooks has meant that the board need to diligently and proactively address the potential risks of trading in the Christmas period.”

Phil Carter, Andrew Scott and Daniel Walley of PwC have been appointed joint administrators of the University Co-operative Bookshop Limited and its subsidiary Co Info Pty Ltd.

Mr Carter said there were still hopes of selling the company, which employs more than 180 people, has 34 stores on university campuses and is Australia’s largest co-operative with more than two million members.

Co-op Bookshop also owns 63 Curious Planet stores, formerly known as Australian Geographic, after purchasing the Dick Smith-founded business from Myer Family Investments three years ago.

“The Co-op Bookshop has been a successful and integral part of university life for generations of Australians, and Curious Planet is a well-loved educational and scientific store,” Mr Carter said in a statement.

“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 added, “We are currently undertaking an urgent review of the business in order to stabilise its relationships with key stakeholders and ensure that the store network enjoys a successful Christmas trading period.”

Co-op Bookshop chief executive Thorsten Wichtendahl, left.

Another director of Co-op, former Macquarie University vice-chancellor Dianne Yerbury, said it was “a difficult but necessary decision that the Board has made to ask for external assistance from PwC given the continual decline in textbook sales and soft retail market”.

Suppliers owed significant sums include textbook publisher John Wiley & Sons, toy seller Independence Studios, Australia Post, the University of Western Australia and Sydney University.

According to The Sydney Morning Herald, which first reported on “nervous” suppliers last week, one of the big questions will be how more than $500,000 was paid to a company owned by chief executive Thorsten Wichtendahl for goods not yet supplied.

Hat maker Jacaru Australia received more than $857,000 in payments from the Co-op this year for $315,000 in delivered stock. Mr Carter told the paper he had “a lot more questions than answers” and investigating the payments would be “one of the critical jobs of the administrators”.

Mr Wichtendahl joined Co-op in 2011 as chief operating officer and oversaw its expansion from 39 to 65 stores. He was appointed CEO in 2016. At the time, the company said he had been “the key driver behind its multichannel services, product diversification, growth and operational strategies”.

In recent years Co-op Bookshop — founded by two University of Sydney students in 1958 — has been criticised for straying away from its principles of democratic control by members.

Student publication Farrago asked Mr Wichtendahl in 2016 why the company barred students from the board. “Quite frankly, I wouldn’t want to be reporting to a 21-year-old, first-year uni student,” he said at the time.

“I take my guidance, strategic direction, coaching and mentoring from our board of directors – experienced company directors.”

The first meeting of creditors will be held at the Portside Conference Centre in Sydney at 11am on Wednesday December 4.

Mr Wichtendahl has been contacted for comment.

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