Online book retailing is about to get a little bit less competitive, with Amazon announcing that it will buy The Book Depository.
The cost of the transaction remains undisclosed.
The British company, which is popular in Australia due to its low prices and free shipping, was expected to chalk up sales of £120 million ($180 million) for the fiscal year ending in June, according to industry specialist TheBookseller.com. Last year it had an operating profit of £2.3 million, TheBookseller.com said.
On its website, the company sought to reassure its customers that its service and range would improve after the acquisition by Amazon.
“The Book Depository and Amazon are aligned in wanting to ensure the best possible experience for customers,” the group said. “Working with Amazon we will look to continue to increase our vast selection of great titles and provide even better customer experience.”
“With the support of Amazon, we look forward to continuing our growth and providing an ever-improving service for readers globally,” Book Depository founder Andrew Crawford said.
Amazon’s vice-president of European retail Greg Greeley said: “The Book Depository is very focused on serving its customers around the world, and we look forward to welcoming them to the Amazon family.
The deal is subject to regulatory approval.
The Book Depository offers 6 million books for delivery globally.
Major player in Australia
Locally, the Amazon website attracts much more traffic than The Book Depository, but the latter is growing fast.
In the week ending December 25, 2010, Amazon garnered 2.23 million hits by Australian users, according to data from web traffic research group Experian Hitwise, while in a separate measure the rapidly growing Book Depository had 149,800 hits in the same period.
‘‘Australian booksellers are already aware that a lot of individual purchases are going overseas,’’ said Tim Coronel, publisher of industry journal Bookseller+Publisher. ‘‘The majority of overseas sales are from Amazon sites and Book Depository, so bringing them together could be potentially a very big deal.
‘‘It could actually make them a major player in the Australian book market without them having a physical presence here.’’
In another significant move for the local online market, administrators for collapsed private equity company REDgroup, which bought and gutted the Angus & Robertson and Borders retail chains before collapsing this year, said today they had sold the company’s online business to the Australian arm of Penguin’s owner Pearson.
REDgroup administrators Ferrier Hodgson also said today two locations of Angus & Robertson would be sold in Queensland with a third in negotiations for sale. The remaining 16 would be closed by the end of the month, claiming 174 retail jobs.
Mr Coronel said the purchase by Pearson was ‘‘a significant move because it’s a publisher moving directly into a retailer’s space”.
“The book market is changing incredibly quickly,’’ said Mr Coronel. ‘‘It’s a perfect storm-week, really.”
Source : Sydney Morning Herald