The future of a major Australian retailer is in limbo

Online retailer Booktopia previously requested the Australian Securities Exchange (ASX) on Monday to pause trading.

But on Friday it requested a further extension of the trading halt until June 28.

“The company is not yet in a position where it is able to make an announcement on the outcome of its strategic review, including the pursuit of additional financing,” Booktopia’s general counsel Alistair Clarkson wrote to the ASX.

The long-awaited announcement comes just two weeks after the company laid off 50 employees and its former CEO resigned after spending less than a year in the role.

However, the company is still looking for an option to ensure its “financial viability”, the company revealed to the ASX.

Mr. Clarkson wrote that the company continues to face “liquidity issues” and that he is seeking alternative sources of financing, both to cover layoff costs and to provide the company with ongoing working capital.

“The company continues to seek support from suppliers, existing shareholders and other potential shareholders. It is also exploring alternative strategic options,” he told the ASX.

He added that interest had been expressed by some parties who were conducting due diligence to determine whether financial “support will be forthcoming.”

“The timetable for exiting the suspension is based on the form that any financing takes and the company expects that it will be in a better position to advise on the viability and form of that financing by the end of next week,” he added to it.

Continuing trading on the ASX would jeopardize the ASX’s ability to seek support and find funding, the letter concluded.

Earlier this month, the embattled e-commerce company cut 50 positions at its Sydney headquarters in the northwestern suburb of Ryde.

This follows from the forty people that Booktopia fired in January last year.

Also in June, Booktopia hit a share price low of 4.5ca, a drop of 98 percent.

On June 3, then-CEO David Nenke resigned after just a year in the role, prompting Booktopia co-founder and former CEO Tony Nash to step in.

A slew of senior managers have also resigned in recent months, including the Chief Financial Officer. The Chief Marketing Officer resigned last year.

The operating results for the first half of the current financial year left much to be desired.

Sales fell 21 percent to $86.3 million, prompting an investigation into the company, which will be announced soon.

“With this decline in sales and with the organizational restructuring about to be implemented, the company is no longer in a position to provide guidance and is withdrawing the guidance provided to the market in the announcement dated February 9, 2024,” the company said in a statement. statement on the ASX.

Booktopia saw a surge in sales during the Covid-19 pandemic, when people were stuck indoors with extra money to spend.

The book company’s revenue soared, reaching $223.9 million in revenue in fiscal 2021.

The following fiscal year it earned even more, at $240.8 million.

But now that the economy is weakening and consumers are cutting back on their discretionary spending, the question becomes whether the operation can continue.

– with Alex Turner-Cohen

Originally published as Major retailer’s future in limbo as it asks for trading freeze extension