Booksellers' woes worsen as franchisees seek to defect

Chris Zappone, Sydney Morning Herald

April 5, 2011

The turmoil in the book industry has worsened with the breakaway of 25 Angus & Robertson franchised stores from the parent company over the handling of the firm's slide into administration.

The rebel group is particularly angry over the treatment of gift vouchers in the wake of REDgroup's voluntary administration in February. The administrators initially asked voucher holders to match the vouchers' value in cash when redeeming them, and then halted all redemptions on April 3.

Franchisees have exercised their right to terminate as a result of Angus & Robertson's "continued breach of the franchise agreement", said Marie Fitzpatrick owner of New South Wales-based The Bookshop Bowral - formerly known as Angus & Robertson Bowral.

"This includes Angus & Robertson's failure to provide the services and benefits it is obliged to provide pursuant to the franchise agreement," she said, commenting as spokeswoman for the independents.

"In particular, this included an obligation that customers of Angus & Robertson franchisees could redeem gift cards."

Ferrier Hodgson administrator Steve Sherman, though, disputed the franchisees' ability to sever their ties with Angus & Robertson.
"The administrators strongly refute the purported terminations and intend to hold each of the franchisees fully accountable under the terms of the franchise agreements," Mr Sherman said.

"The Angus and Robertson brand continues to operate and the administrators remain optimistic that a long-term solution can be determined for the benefit of all stakeholders," Mr Sherman said.

The handling of the vouchers triggered anger among certificate holders at both Angus & Robertson and at Borders, REDgroup's other main bookselling operation in Australia.

Ms Fitzpatrick said administrators had received notification of the group's decision earlier today, communicated by the group's lawyers.
"Despite continual requests from the Angus & Robertson franchisees, Angus & Robertson refused to comply with its obligations in respect of this very important matter," she said.

In addition to the former Bowral location, locations in all states but Victoria are contained on the list.
Ms Fitzpatrick described her Bowral business as successful but said it had been hurt by the handling of the REDgroup's fall into administration.

The full piece at Sydney Morning Herald.