Booktopia’s losses have worsened as sales slide from Covid-19 peaks

Booktopia is the latest online pure play retailer to post ballooning losses and falling sales as the economy opens up from Covid-19 lockdowns.

Booktopia has posted ballooning losses and sliding sales as online shopping normalises from pandemic peaks last year.

Booktopia is the latest pure play online retailer to crash further into deepening losses as the heat comes out of the online shopping frenzy experienced at the beginning of the Covid-19 pandemic, but which has now dissipated to leave some retailers with sliding sales and widening losses.

The online bookseller, which has gone through a tumultuous year marked by falling sales and boardroom upheaval led by its ousted chief executive, has posted a 15 per cent drop in its interim revenue to $110.077m as its losses blew out to $3.894m for the half from a loss of $633,000 in the first half of 2022.

Its underlying loss of $1.334m was against an underlying profit of $5.757n.

Booktopia, the nation’s largest domestically owned online book retailer, saw huge leaps in its sales and earnings in the early months of Covid-19 as households in lockdowns and stuck with other travel restrictions ordered up books.

But with the opening of the economy and the end of restrictions, that appetite for books has normalised.

Booktopia said on Tuesday the total number of units shipped was down 16.7 per cent to 3.94m, while the average selling price per unit shipped was down 2.4 per cent to $27.60.

The first-half loss was partly generated by one-offs, including a $2.2m gain from the re-measuring of a previous provision for penalties relating to an ACCC matter and a $2.72m loss for the accelerated depreciation of assets in the current customer fulfilment centre. Booktopia chairman Peter George said the first half presented difficult trading conditions with various economic headwinds combined with volatile conditions as consumer behaviour adjusted to the post-Covid retail environment.

“We have taken the necessary action to build a better business for the long term. We believe we have the right people, strategy, and brand to return to more traditional levels of growth in the future.

“We are optimistic the new customer fulfilment centre at South Strathfield will improve margins and lower operating costs, and we are now focused on ensuring a smooth transition to the new facility in November and securing longer-term funding.”

In response to the challenges to its business, Booktopia kickstarted a cost-cutting initiative that will deliver around $12m to $15m of annualised savings in 2024 and beyond, and which included job losses.

Other pureplay online retailers have also posted disappointing losses this reporting season, including Catch Group, owned by Wesfarmers, which recorded an interim loss of $108m, up from a loss of $44m in 2021. On Monday, Kogan.com revealed a doubling of its net loss to $23.8m for the six months to December, as revenue dropped 34 per cent.