The situation at EUK does not look good. 700 staff lost their jobs last night, 2 weeks before Christmas, and the administrators are said to be calling in the company's debts. This is not good for the supermarkets either, who owe most of the money, although one cannot help but think that their sitting on this money for so long (figures of up £25 million are being talked about for both Salisbury's and Tesco), then EUK may not have been in this mess.
That though is the name of the game - as George Bush would have put it - the haves and the have mores. It has always been the way that some have to be sacrificed so that others remain profitable. Perhaps it is time to start questioning that ethos, as we are all entitled to earn a living.
The situation with Zavvi, which previously traded as Virgin Megastores, is even worse, as they owe EUK £106 million - how and more to the point, why the accounts department at EUK allowed this happen is beyond me - they should never have allowed things to get to this stage. If Zavvi fails to pay this debt, then they too could be placed into administration, with the loss of yet more jobs. A statement from the company is expected soon.
In the meantime, with no buyer for Bertrams, the book world is getting very nervous. Publishers are also affected by the demise of EUK, with the wholesaler owing them money, which they are unlikely to receive in a hurry. A total figure of £25 million has been suggested as money owed, with Random House the worst hit. Could this also bring publishers down I wonder - I sincerely hope not.
One does wonder what this whole thing is about and what would happen if Bertrams were to go. This would leave just one major wholesaler, in the shape of Gardners, for the whole book trade, and handful of smaller specialists.
MD Michael Neil has been putting a brave face on things, insisting that it is business as usual and the scaling down of EUK, which has still been supplying some stores, would not affect attempts to find a buyer. Talks are continuing with a number of interested parties and there is no set time scale for the sale. But he added: "We have to be realistic. Christmas is in the way but we want to get a deal done as soon as possible."
The wholesaler, which was bought by EUK in January 2007, has separate financing and has not been affected by EUK's administration. The administrators confirmed that Bertrams will continue to trade as normal, but their situation remains precarious.
Big publishers and distributors agreed with Bertrams last week that the wholesaler would pay cash upfront for stock. Neil admitted that these new terms were affecting business (how can they not), as they can only buy what they know will sell. This is seriously bad news for the smaller publishers, although most requests for their stock will be as special orders and therefore firm sale anyway. This decision is though bound to affect availability of slower selling and niche titles.
I hope that they manage to weather the storm, but if the worst does happen, could this mean the end of wholesalers in our country, or will a new contender emerge, in the form of a smaller company keen for expansion? If so, who could that be? Gardners could not buy Bertrams out, as that would create a monopoly, although if Bertrams do go, there will be a monopoly anyway.
If the publishers fail to get back what they are owed, where will it leave them - these costs will have to be recovered from somewhere, and this will inevitably mean several things - pay freezes for the staff, a cut in advances for authors (especially for first timers), and an increase in cover prices. Will they have to re-negotiate terms with the wholesalers that are left, and with book stores that they supply direct to for core stock? Could this lead to a re-opening of the firm sale debate all round and hasten its introduction, and will that hinder or benefit the small presses?
Questions, questions and no answers.