September 17 2014 Latest news:
Wednesday, July 18, 2012
Despite a decline in the UK wholesale book market Bertram Books managing director Graeme Underhill sees huge potential for the company started in Elise Bertram’s chicken shed. Business writer Annabelle Dickson reports
The management team at Bertram Books crack amused smiles as they admit which book is leaving their giant Thorpe St Andrew warehouse the fastest.
But the directors have more to smile about than the raunchy novel Fifty Shades of Grey.
Just three years ago the company was on the brink of collapse – see panel, below. Owned by EUK, part of Woolworths, book stocks were depleting fast as it was cash starved by the parent firm’s troubles.
Over the past couple of years, however, two acquisitions and steady growth have seen an extra 150 jobs created at the Thorpe St Andrew headquarters and the company now operates in 86 countries around the world.
Despite a decline in the UK book wholesale market, managing director Graeme Underhill sees great growth prospects for the company, both in its international and digital ebook business.
He said: “We have stabilised the business having had difficult times when it was in administration. Our strategy is to grow sales in this business. We have brought a more commercial focus to the business and we have been prepared to invest.
“We think there are great prospects for this business and even though people might be concerned about the state of the book market and whether it is in decline and under threat by digital, these are big stable markets that we believe we can grow.”
In Thorpe St Andrew, staff are not just packing the latest popular paperbacks into boxes and sending them off to the bookshops.
The company has come a long way from where it started in Elsie Bertram’s chicken shed as wholesale distributor for Pan Paperbacks in East Anglia – a picture of which hangs in the boardroom in Thorpe St Andrew.
It also supplies public libraries with bar coded and labelled books.
And the chances are if you are a student or academic using your university library for books and journals it will be have been supplied, in hard copy or digitally, by part of the Bertram Books business.
Mr Underhill said: “We have good offers for public libraries, have a good offer in wholesale and we have a good offer with the Dawson digital offer.”
The company bought Europe’s largest supplier of academic books, ebooks and “shelf ready services”, Dawson Books, last year and added to the academic book and journal business with Dutch-based Hootschild earlier this year.
This, Mr Underhill said, was designed to create scale for the business.
All the operations and servicing of the Dawson business has been moved to Norwich creating 60 new Norfolk jobs, leaving just 30 back office staff at its original base at Rushden, in Northamptonshire.
Mr Underhill said: “We see ebooks as a good growth prospect for us and Dawson has got a good ebook platform.”
But how do you make money in a competitive ebook market?
“We are not competing with Kindle or iPad,” said Mr Underhill. “This is a very different model. First of all it is a niche market. We are going out to the academic market and not taking on Apple or Google or Amazon. It also is a credit based system, so the student doesn’t buy the digital book. The university buys credits for the use of that book.”
He said: “We are the market leader and with Dawson books, our market shares are pretty big in the UK, both in digital and in print.
“Both are over 50pc, which is a big market share. We’ve managed to get that market share and continue to build it.
“It is a competitive market out there. There’s plenty of people out there that can do what we do, but to win that share we have to be the best at what we do.”
Buying and marketing director Toby Bourne said the ebook platform for academic libraries was the favoured method of downloading digital content in the UK. He added: “It has got 200,000 books, over 450 publishers from across the world.
“All the big academic publishers support us. It has been growing incredibly quickly. It has been growing 50pc each year.”
But with academic institutions and libraries a big part of the business, with government spending cuts there must be concerns.
Mr Underhill said: “It has made business difficult. If you take the public libraries side of things, it has settled down. If you take 18 months ago then it was very depressed, but it has bounced back this year.
“The local authorities have sorted out their budgets and sorted out where they can make their savings and where they need to spend.
“The book fund is a very small proportion of their overall budget.”
Sales director Jason Cherrington said on the academic side things had changed with the students having to pay more for their education
He explained: “It drives an expectation from students that the quality and availability of books and services of print and ebooks is at a very high level.
“If you are paying £9,000 for a course then you would expect the right content and the availability of that learning tool to be there so that can support the work we are doing.”
But it is not just the digital, library and academic field in which the company can see big growth potential.
Mr Underhill said there was “massive” opportunity for growth in the international market.
He said: “The UK [book wholesale] market is down 10pc, the stats are showing, but these are still big, stable markets. The international markets are growing – particularly for English language books.”
But he said there were still opportunities to grow the wholesale business despite the overall market being down.
“This market we have relatively low market share so there are still massive opportunities for this business.”
In a corner of the warehouse books you can see the names of big companies which are supplied by Bertram Books as the internet continues to grow.
It dispatches books on behalf of Amazon, Tesco, Sainsbury’s, The Guardian and the Daily Mail.
However, Mr Underhill insisted that independent book shops were also important.
He said: “Independents are less of the overall turnover of this business than they were 10 years ago, but they still represent an important part of this business.
“There are fewer of them, there is no doubt about it, but our job is to make sure we support them in the best possible way.
“The survival of the independent bookshop on the high street is important, not just for this business but for the country and the availability of books.
“They have been in decline, but it has stabilised and you do continue to see the closures of bookshops exceeding new openings.”
But buying and marketing director Toby Bourne said the company had been delighted with the performance of independent bookshops in the last few months.
“The firm has a forum to help independent booksellers find the right quirky titles to sell across the country.
He said: “We need to make sure we are getting those into the bookshops so people enjoy them and come back again and again and again.
“We are doing everything that we can to support them, from making sure they have the right books, to the way you present them and marketing.”
So what about the future of the company?
Having already made two successful acquisitions, will that strategy continue?
Mr Underhill said: “If the right business comes along that has the right characteristics with the right products that are complementary to our strategy.
“We are looking for other acquisitions. There are a number of opportunities that come our way.
“That would add value. It could be across any of those businesses if the characteristics and price are right.”
Phones 4u is to go into administration - placing more than 5,500 jobs at risk - after network operator EE joined Vodafone in cutting ties with the retailer.