PwC to oversee administration of The Book People
The Book People has filed for administration with just one week to go before Christmas, putting 400 jobs at risk. Big Four firm PwC has been appointed as the administrator while the troubled book retailer looks for a buyer.
The UK high street has spent the course of 2019 languishing down in the doldrums, with British retail seeing its highest level of store closures since the last recession. While this has been catastrophic for the UK’s sluggish economic growth – as well as for the thousands of staff across the country made redundant before the New Year – it has proven to be something of a bonanza for consulting firms.
The UK’s top advisory companies have been enjoying heightened demand for their restructuring services, something which has been a welcome shot-in-the-arm to many of them, as their bottom-lines face Brexit-related pressures elsewhere. PwC was most recently a beneficiary of this trend, when it was announced in November that it would oversee the administration of long-standing parenting brand Mothercare. Now, PwC has been tapped by yet another troubled retailer, this time in the entertainment segment.
Founded in 1988 in Godalming, Surrey, The Book People sells books, gifts, toys and stationery, online or via a catalogue, and often at discounted prices. It has an annual turnover of £50 million and sells more than 17 million children's books a year. While it has adapted its business model to be suited to a booming e-commerce market, it has nonetheless faced stiff competition from the likes of Amazon over the last decade. At the same time, e-commerce has come under the same pressures as the broader retail scene, having to discount heavily to retain customers who have seen their spending power reduced in recent years.
According to a release declaring PwC had been installed as administrator, it was also stated that the business will continue to trade, while there are no plans to make any of the 393 employees redundant. This measure will ensure that customers should receive their orders in time for Christmas. Toby Underwood, joint administrator and restructuring Partner for PwC, said his team was now exploring a sale of the business.
Underwood added, "I appreciate the obvious concerns that staff in particular will have as we move towards Christmas. Whilst the administrators have funding to meet the payroll for December, the longer-term prospects for the business, staff, customers and suppliers will clearly be dependent upon whether a sale can be secured."
