Scribo, the book distribution business purchased in late 2008 by Gordon and Gotch is to close at the end of this month. They sent an announcement to retailers late last week.
Scribo is big, representing more than 200 publishers to the Australian and New Zealand book trade. They claimed to be Australia’s largest independent book distributor. Here are the reasons they cited for the decision to close:
- Soft market conditions
- Increase in offshore online sales combined with the strength of the Australian dollar
- Closure of key retail outlets
- Increased competition from international wholesalers
- Emergence of ebooks
PMP, the owners of Gordon and Gotch, had high hopes for Scribo. Many newsagents were customers, appreciating access to thee range of Scribo titles for their book department. David Hogan moved from running Gotch to heading Scribo. The decision to close this division will further challenge the PMP share price which is at 60 cents. It was $1.07 just over six months ago.
A low-lying cloud of gloom hangs above book retailing globally and here in Australia. The sentiment about our local situation has been driven by the collapse of Borders and the closure of many Angus and Robertson stores. the result is challenging conditions for book retailers. Some are doing well while others struggle. The key to success appears to be focusing on local customer needs. This is so true for newsagents too.
The closure of Scribo is a reminder that distribution is a tough business, operating with fractional margins.