Major retailer in trouble after mass lay-offs as trading halts

A major Aussie retailer has abruptly halted trading on the stock market as it prepares to make an announcement about its ability to continue.

A major Aussie retailer has abruptly halted trading on the stock market as it prepares to make an announcement about its ability to continue.

Online seller Booktopia requested to the Australian Securities Exchange (ASX) on Monday to pause trading because it had a “pending” update to shareholders.

That update will involve the outcome of a strategic review that began in February, after revenue dropped by 21 per cent.

“The suspension is requested from the date of this letter until the commencement of trade on Friday 21 June 2024,” Booktopia’s general counsel wrote to the ASX.

The much-anticipated announcement comes just two weeks after the company laid off 50 staff and its former CEO resigned after spending less than a year in the role.

Booktopia has halted trading pending an announcement.

Earlier this month, the embattled ecommerce business cut 50 roles from its Sydney head office in the northwestern suburb of Ryde.

That followed from the 40 people Booktopia made redundant in January last year.

Also in June, Booktopia hit a rock-bottom share price of 4.5c a share, a drop of 98 per cent.

It’s been a rough month for the retailer.

On June 3, then chief executive David Nenke resigned, after just shy of a year in the role, and Booktopia co-founder and the former CEO Tony Nash had to step in.

A slew of its senior executives have also resigned in recent months, including its chief financial officer. Its chief marketing officer resigned last year.

A Booktopia spokesperson told news.com.au “We aren’t in a position to make any further comment at this time. Further announcements will be made in due course.”

Booktopia has had a number of senior resignations and also mass lay-offs in the past few months.

Booktopia appears to have been haemorrhaging money.

The company’s results for the first half of the current financial year left much to be desired.

Its revenue dropped from 21 per cent to $86.3 million, prompting the review into the business which is set to be announced shortly.

“With this decline in revenue and with the organisational restructure about to be implemented, the company is no longer in a position to provide guidance and withdraws the guidance provided to the market in its announcement made on 9 February 2024,” the company said in a statement on the ASX.

Booktopia had enjoyed a wave of sales during the Covid-19 pandemic, when people were stuck indoors with extra cash to spend.

The book company’s sales surged, raking in $223.9 million in turnover in the 2021 financial year. The following financial year it made even more, at $240.8 million.

But with the weakening economy and consumers cutting back on discretionary spending, it’s brought into question whether the operation can continue to run.

BookScan figures have found an 8.3 per cent industry decline in the reading industry, as of January this year.

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