Trio of PwC partners oversee administration of Co-op Bookshop

Consultants from PwC have been appointed as administrators for Co-op Bookshop, following the Australian retail firm’s decision to enter voluntary administration on the back of a substantial debt burden.

According to Sydney Morning Herald, which broke the news, Co-op face a debt pile of approximately $15 million, owed to toy retailers and publishers. The administration extends to the company’s ownership and operation of online nature content platform Australian Geographic.

Restructuring experts from PwC – Phil Carter, Andrew Scott and Daniel Walley – have been called in to support with the administration process. The trio are all partners at the Big Four accounting and advisory firm, and were previously partners at consulting firm PPB Advisory before it was acquired by PwC last year. Carter, Scott and Walley have been tasked with overseeing the administration, kicking off with an investigation.

The three executives have confirmed that they will be looking into a set of transactions amounting to $500,000 in advance payments made to a supplier, which took place under the guise of Co-op’s Chief Executive Thorsten Wichtendahl. The goods in question have not yet been supplied.

According to Chairman at Co-op Joe Merhi, the company was struggling with withering sales, which constituted a major reason for the decision to appoint an administrator. “The combination of weak retail trading figures coming up to Christmas and the collapse of 'over the counter text book' sales by over 40 per cent 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,” said Merhi.

Despite growth in the overall online retail space in Australia, Co-op is the second omnichannel and e-commerce platform to go into administration in recent weeks. Online furniture retail shop Zanui recently appointed administrators from fellow Big Four firm KPMG to support with a sale, to counter its dwindling revenues.

The lower than expected Christmas sales is also indicative of broader industry trends – a spending crunch is impacting many Australian retailers, with a dampened festive season forecasted by some.

Speaking of the plans for Co-op Bookshop, PwC partner Phil Carter said that the ambition is to keep the company going. “We intend to keep all Co-op bookshop and Curious Planet stores operating on a business as usual basis while we seek interested parties for the sale of the business on a going concern basis.”