The Bookseller.com

20th November 2008

EUK moves to reassure publishers

10.10.08 Graeme Neill and Catherine Neilan

Entertainment UK and Bertrams have sought to reassure publishers and distributors after supplier fears over the health of parent company Woolworths came to a head last week. Representatives from both Entertainment UK and Bertrams held separate meetings with the Publishers Association, speaking directly to PA members with distribution arms, as new terms were thrashed out.

Entertainment UK m.d. Steve Lewis told The Bookseller that the company had held a flurry of meetings with suppliers across music, DVDs and books. “What we have done is come to a sensible agreement with publishers so that they are still taking a level of risk but we have put arrangements in place at our end that are acceptable to both publishers and retailers,” he said.
It is understood that normal credit terms will continue during October and November. However, in December additional payments will be made to publishers in order to reduce their exposure during the peak period.

The events follow concern about the long-term health of parent company Woolworths. A number of insurers have cancelled or reduced credit cover.

Lewis said that the economy was in “very challenging times” but stressed that despite fears about Woolworth’s health, there had been no impact on the wholesaler’s sales. “Woolworths paid its fourth quarter rent last week,” he said. “As a board we are comfortable with the position as a group as we trade into Q4.”

Michael Neil, m.d. of Bertrams, was also bullish about the future of his business. “We are doing fantastically well,” he said. “We are profitable, having great sales growth and are cash generative. We are going to have a great Christmas.”

Ian Hudson, Random House deputy c.e.o and president of the Publishers Association, said that EUK and Bertrams “have done everything they can to make people feel comfortable”. “Both wholesalers play a fundamental role in the book supply chain,” he said. “Bertrams particularly into the independent sector and EUK into the supermarket sector.” He said the discussions gave suppliers “assurance and comfort”.

The continuing speculation about Woolworth’s future again raises the possibility that EUK could be spun off into a stand-alone business in the New Year. Nick Bubb at Pali International said: “It’s always been odd that Woolies supply their main competitors with music, DVDs and books,” he said. “The structure of the Woolies group certainly looks unsustainable and it may yet go bust.”

Retail Financial Bertrams EUK woolworths Home Graeme Neill and Catherine Neilan

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