Although corporate turmoil has plagued Booktopia (ASX: BKG) over the past 12 months, with 90% of the company valuation slashed, there may soon be some light at the end of the tunnel with the books retailer set to start fresh at a new distribution facility. 

The move, which will only be down the road from their current customer fulfilment centre (CFC) whose lease expires next year, will incorporate robotics and automation to assist with storage and order packing. To facilitate the upgrades, Booktopia is finalising a $14 million finance package in lieu of raising capital where any funds raised would be at a bargain basement price with BKG shares now trading at $0.30, down from their 52-week high of $3.00.

The substantial decline has been attributed to broader struggles in the eCommerce sector where online sales growth witnessed during the pandemic have not been sustained, and higher supply chain expenses. 

While some of the existing machinery will be moved over to the new facility, Booktopia has warned shareholders that their upcoming FY22 results will include one-off accounting costs relating to leases and equipment write downs. 

Doing so now would likely provide a better opportunity for Booktopia to bounce back over the next 12 months with the Company having already flagged a weak financial result due to their decline in sales.  

“We continue to see opportunities for growth in the Australian book market and the investment in a new customer fulfilment centre is not only critical to business performance but also to ensure Booktopia is able to meet its customer promise now and into the future,” said Booktopia Acting CEO, Geoff Stalley. 

“The new CFC re-shapes our supply chain and unlocks a significant opportunity to increase profitability and generate cash with a purpose-built design that is efficient and scalable.” 

The move will likely give the next CEO a fresh start where Booktopia seeks to refresh its brand following corporate drama that saw its Founder, Tony Nash stand down as CEO. That resignation came after shareholder backlash when Nash sold 3,500,000 shares at an average price of $1.75 in December 2021, two months before the Company announced a 49% decline in EBITDA (to $4.1m) as the share price continued to tumble. 

Although Nash was re-assigned as the Company’s Chief Growth Officer, the Board took the decision to stand him down from his duties and ban him from the office in June, citing the need for any incoming leader to have their opportunity to start fresh. Nash remains a member of the Board however, and its largest shareholder.  

Once the move into their new fulfilment centre is complete, in time for Christmas 2023, Booktopia expects they will be able to fulfil orders for more than 12 million books per annum while providing improved working conditions for staff.