The business behind The Co-op bookshop and Curious Planet (formerly Australian Geographic) has collapsed into administration, amid allegations its chief executive oversaw hundreds of thousands of dollars in advance payments to a supplier he controls.
Voluntary administrators from PricewaterhouseCoopers were appointed to oversee the affairs of University Co-operative Bookshop Limited on Sunday evening, following a sustained period of weak trading across the business.
Established in the late-1950s as a student co-operative (owned by members) textbook retailer, Co-op bookshops have a long and storied history in Australia, but in recent years the business has come under criticism over its purported failure to represent student voices.
The Sydney Morning Herald and The Age have recently published a string of reports into the affairs of the business, and earlier this month revealed the company owed $12 million to suppliers.
Chief executive Thorsten Wichtendahl controls one supplier which has reportedly received more than $500,000 in advance for goods it has not supplied yet, the Nine-owned papers reported.
The Co-op operates 34 stores on university campuses nationwide, while Curious Planet — which was named Australian Geographic until the rights holders pulled the plug on a licensing deal in October — runs 63 stores.
Financial documents reported by the ABC in 2017 show the company has been struggling for some time, booking losses in 2015 and 2016, while a PwC statement circulated Tuesday morning claims over the counter textbook sales plummetted 40% last year — more than double the rate of decline from 2017.
Administrators Phil Carter, Andrew Scott and Daniel Walley now face the prospect of trading the ailing company through Christmas while trying to drum up interest among potential buyers.
“We are currently undertaking an urgent review of the business in order to stabilise its relationships with key stakeholders and ensure that the store network enjoys a successful Christmas trading period,” Carter said in a statement.
The company will run on a business-as-usual basis for the time being, the administrators said.
Carter said administrators are in the “early stages” of reviewing operational and financial aspects of the business.
“As with any company administration of this nature, we will review all supplier payments and report our findings to creditors at the appropriate time,” Carter said.
PwC also circulated a statement from Co-op chairman Joe Merhi on Tuesday, which did not address outstanding allegations regarding Wichtendahl’s conduct.
“The combination of weak retail trading figures coming up to Christmas and the collapse of ‘over the counter text book’ sales by over 40% from last year, has left the Board with no alternative but to appoint a voluntary administrator to help this proud organisation through this period of time, leading up to Christmas,” Merhi said.
“The Board need to diligently and proactively address the potential risks of trading in the Christmas period.”