Tuesday, August 14, 2007

Bookstore extortion

One of Australia's biggest retail book sellers, Angus & Robertson, tries to extort money at punitive interest rates from small Australian book publishers -- and then the publisher of the 2007 Miles Franklin Award winning book decides to fight back, with a very public "up yours" letter.

And when I say punitive, I mean it: 1825% per year. Yes, almost two thousand percent per year, five percent per day.

A&R's Commercial Manager, Charlie Rimmer, is apparently a hatchet-man from A&R's former owners, British bookseller chain the W H Smith Group. According to comments, the British retail book market has been gutted by similar tactics employed by (among others) W H Smiths. Rimmer has worked at A&R for a little over a year now.

A&R's demands were not just arrogant, they were actually quite extraordinary, as this analysis by Teresa at Making Light reveals:

Later we will read how A&R has been determinedly paring down, de-rationalizing, and generally muddling their own purchasing operation so badly that their bookbuyers no longer see any of the books they’re ordering.

    We have concluded that we have far too many suppliers,

Malarkey again. Rimmer is inappropriately borrowing language from other industries, as though A&R were a construction firm and he’d noticed they were buying their bricks from too many different brickyards. Bricks are interchangeable. Books aren't. A house built with bricks from one or two brickyards will be just fine. A bookstore that only carries stock from a few publishers will have a thin, poor selection to offer its customers.

Multiple suppliers--that is, a broad range of publishers and books to choose from--is a good thing, if a bookstore chain knows what it's doing.

...

Wouldn't life be interesting if we could just tell our trading partners that we've decided to raise our "minimum threshold of profitability" on past transactions, and they owe us?

...

    All rebates are paid quarterly for the previous quarter's performance, you must ensure that your remittance, with calculations, is received by us by the 7th of the month following the preceding quarter. Any remittances not received by this date will attract a daily 5% interest charge.

There's no way the publishers can calculate that in time. The only way to avoid that piratical interest charge is to overpay, then try to get a refund on the overpayment. And you can bet your booties that A&R doesn't pay publishers anywhere near that quickly.

...

Alternately, it's possible that A&R's management stands to personally profit if the company goes public and the initial stock offering does well, so they're running a quick slash-and-burn raid on their more vulnerable suppliers in order to temporarily make their company look more profitable. Or maybe it's something else. It's tacky and stupid and self-defeating, whatever it is.

Self-defeating is absolutely right. A&R's arrogant, ham-fisted money-grab against smaller Australian publishers hit the Internet and grew legs. Just a few years ago, it might have passed without comment -- but now, it's everywhere. After just a few days, the story reached number two on Google's search page for "Angus and Robertson", behind only A&R's website itself. (Oh my, wouldn't a Google bomb go down well now?)

Readers, that is to say, people who buy books, quickly inundated the original Sydney Morning Herald blog post with their promises to boycott A&R. Many readers explained that with lousy book selections and unhelpful, untrained staff, A&R was a poor shadow of its former self, and this was the final straw. And then a independent buying group stepped into the fray with a deliciously over-the-top parody of A&R's demands.

One thing that puzzles me... every time I go into a Borders bookstore, it's full of customers, the shelves are jammed full with a great variety of books, the lines in front of the cash registers are long. At A&R stores, the customers are thin on the ground, the shelves are lightly stocked and mostly cheap remainders on sale for half price or less, and there's never a line at the cash register. So how come the rumour mill has it that A&R is likely to buy out Borders Australian operation? Is the Australian retail book market from Bizarro World, where you make money by not selling lots of books, and lose money by having a thriving business?

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