Week 26/20 – week ending 26 June

Clock stops for Bertrams as it goes into administration

The drawn-out saga of the potential sale of the business, announced earlier in the spring, has come to an unhappy conclusion with the news that the business has gone into administration. Administrators TBA issued the announcement on Friday (19 June).

The collapse affects more than 450 staff as well as many suppliers who, in addition to facing reduced sales owing to the Covid-19 pandemic, are likely to be owed substantial sums by the wholesaler. One small-to-medium sized indepedendent told BookBrunch that it was owed £12,000 – “not life-threatening but we could certainly do with the money in our account right now!”.

TBA’s announcement stated:

“We can confirm that Bertram Trading Limited, the global book wholesaler, has entered administration along with Education Umbrella Limited, a supplier of textbooks and digital education resources and Dawson Books Limited, an academic and professional library supplier. Book wholesalers have suffered from falling demand in recent years due to changes in the distribution model for literature and the rising popularity of e-books. These factors, combined with the Covid-19 related closure of many public libraries and educational facilities, meant these businesses could no longer operate viably.

“Sales have been agreed in principle with two unconnected parties for the tangible assets and unencumbered stock of Bertram Trading Limited and for the intangible assets of Education Umbrella Limited and it is hoped that these will be completed shortly.

“Unfortunately, the majority of employees have been made redundant with immediate effect with a small number retained to manage the winding down of operations. We are liaising with all employees impacted regarding their statutory rights and to direct them to support from the relevant government agencies.”

There is no word yet on how much money will be repaid to creditors. Publishers are believed to be owed considerable sums, but they will come behind the taxman and staff in the queue.

The wholesaler was advertised for sale by its parent company, equity group Aurelius, in mid-May, with Middleton Barton Asset Valuation handling the disposal. It was described as ‘a leading B2B Books wholesaler’ with a 185,000 sq ft leasehold warehouse, 200,000 titles in stock and an annual turnover of £250m.

In late May the Bertline online sales system was bought out of the business by the BA. The ordering system, which is used by around 300 indies, will be merged into the BA’s Batch operation. Before the Bertline deal the Sunday Times had reported that the company would appoint an administrator, which Bertrams denied on Twitter. “We are not in administration… there is no change to the operations disclosed at the beginning of April which are in a furloughed state for the foreseeable future.”

At the beginning of May Elliott Advisors, owner of Waterstones and Barnes & Noble, bought Wordery, Bertrams’ online bookselling division. Wordery will be a separate business from Waterstones.

In March 2009 Bertram was rescued in a deal with Smiths News, which paid £9m for the business and agreed to settle publishers debts of £16m, after Bertrams was dragged down by the collapse of parent company Woolworths in the autumn of 2008. At that stage the wholesaler’s turnover was about the £125m mark. In 1999, Kip Bertram sold the company he and his late mother, Elsie, had founded for between £35m and £40m, so the deal represented something of a bargain.

In 2014 Smiths News was renamed Connect Group plc, with Bertram, Dawson Books and Wordery comprising the Connect Books division. In January 2018 the division was sold to Aurelius Equity Opportunities for a total cash consideration of up to £11.6m, and was renamed the Bertram Group.

At the time Aurelius was described as ‘a pan-European asset manager with offices in Munich, London, Stockholm, and Madrid’. Its website stated that over the previous 10 years it had grown from a local turnaround investor “to an international multi-asset manager investing in a wide range of sectors and across the capital structure”.

The sale followed a difficult year for the group, which saw its shares fall from 159p in January 2017 to 90p in October. Connect Books recorded a £2m loss before tax, including £3.2m of exceptional charges, in the year to 31 August 2017.

At the time of the sale the BA’s Tim Godfray welcomed the news: “Aurelius seem to be a good fit. They have very considerable resources at their disposal and from their track record, show themselves to be a good, stable, long term investor.”

The prospect the trade now faces is life with just a single remaining national wholesaler, Gardners, for the foreseeable future.

Publishers cautious on returning to offices

London publishers are unsure of the merits of returning to offices in the near future, despite a major easing of lockdown regulations announced earlier this week, citing health and transport concerns, and praising the effectiveness of home working.

Nigel Newton, founder and ceo of Bloomsbury, said: “Our current plan remains to return to the office not before September. Whilst we all love being in the office, we have, like others, adapted well to working from home. The risks remain unknown even to the government and its scientists who are divided.

“In the absence of compelling economic necessity to be in the office – and worse still to travel to it on public transport- we will avoid being guinea pigs in the national experiment to find out if there will be a second wave. We had about 75 cases of suspected coronavirus worldwide in the first wave, in spite of shutting down about two weeks before government lockdowns, and are keen not to risk repeating that for the well-being of our staff.”

Ian Chapman, ceo and publisher, Simon & Schuster, said: “We had less than 10% of our staff placed on furlough leave, the majority of whom have either returned to work or are scheduled to do so over the next week. There are a small number of employees whose roles are primarily focussed on the practicalities of the office that will remain on furlough and we are reviewing the situation continually. All furloughed staff will continue to receive 100% of their salaries. We are looking at a provisional return to the office in September, though that date is subject to change and the first phase would only include a reduced number of staff.

“Whilst the year has been a challenge in ways we could never have predicted, we have responded proactively and with ingenuity across all departments and, as a result, now find ourselves in a strong position as we head into the second half of the year.”

Sara Lloyd, digital and communications director at Pan Macmillan, said: “Of our three furloughed staff, two have returned already and one is due to return in September. We have announced that we will open the office at the earliest in September, allowing for the fact that public transport continues to pose a challenge for so many of us and working from home continues to be effective.”

A spokesperson for Hachette said: “Most of our furloughed staff will have returned by the end of June and we will have less than 2% on furlough in July. We have no redundancies planned as a result of the lockdown.”

Earlier this week it was reported that HarperCollins staff would all be coming off furlough and returning to work by the end of June, except those who remain off work to shield them from underlying health conditions.

Antibacterial book laminate for a post-COVID world?

The first of a new BIC series of events exploring green issues for the industry launched on Wednesday (24th June) with a virtual online presentation featuring expert speakers from Holmen Paper, printers CPI Books, foil technologists Kurz and Graphic Image Films discussing various technical aspects of improving sustainability issues around books.

From the durability of recycled paper (which can be reused between 5-7 times), to the comparative environmental impact of recycled vs paper with fresh fibres (paper made with fresh fibres appears to get a better rating), delegates heard the latest new trends and research.

In particular, there was interest in CPI’s Lisa Faratro’s discussion about the development of vegan glues, now available from one of their printing presses, and the search for an antibacterial coating/laminate for books, something that may be critical in a post-COVID-19 world.

The presentation slideshow for this event can now be found on the BIC website here: (https://www.bic.org.uk/217/Previous-BIC-Breakfasts-2020-2021/), while information about all of the forthcoming Green BIC Brunch and/or BIC Brunch sessions can be found (https://www.bic.org.uk/99/What-are-BIC-Breakfasts?/) and here (https://www.bic.org.uk/97/Upcoming-Breakfasts/).