Are We Being Too Hard on Booktopia?

You would be hard-pressed finding someone in e-commerce today that doesn’t have an opinion on the state of retail – us included.

There have been clear ups and downs, with the ASX spiralling out of control before it settles back down, with investors perhaps a little too hasty (or as our Insights Editor summarised: “Oops, we may have overreacted, soz”). But this has been the general thinking for many retailers in the post-COVID landscape.

So why is Booktopia and its founder, Tony Nash, seeming to bear the brunt right now? And is this a little harsh?

Last week, an article in the Sydney Morning Herald and The Age investigated whether Tony Nash and Booktopia went from ‘hero to villain’ in the eyes of investors.

Sure, Booktopia has experienced a rocky road over the last few months. In fact, its shares have shed 36.7 percent over the last seven days, as reported in our most recent Stock Watch. And in the last six months, these have shed a whopping 85.87 percent.

But is Booktopia the only one? Hardly. I’d like to direct you to look at Kogan’s share prices, which have shed 66.82 percent in the last six months. Temple & Webster shares a similar pattern, shedding 69.14 percent in the last six months. What about Adore Beauty? Their shares have dropped 74.33 percent since January. And don’t even get me started on the others (you can check out the full coverage here).

But I don’t see many articles about these businesses, nor their founders, being dubbed the ‘villain’ of the industry.

As Tony Nash shared in a response on LinkedIn: “Regarding the investors. I heard a story the other day that a junior fund manager at [an] institutional investment house convinced the investment committee to buy 20 percent of Temple and Webster in Feb 2017 when they were 15 cents and had a market cap of $25m,” he wrote. “He’s a bloody legend in the industry now. As you know they got to $14 in the past year even though they are now at $3.80.”

Beyond share prices, I’d like to direct you to another point that he made in his response online.

“I don’t like being the villain in the investment community. There’s nothing fabulous about that,” he shared to the 23,000 plus followers on the social media platform. “But at the cost of being a leader in the book industry. Never! You do realise that there is no country in the English-speaking world with an alternative online bookstore to Amazon, don’t you? Booktopia is the only one.”

Now, in my humble opinion, Nash has a point. Booktopia was founded in 2004, with the famous ‘$10 a day’ budget. Today, it’s the leading online book retailer in Australia. That is nothing to sneeze at, especially when there is a clear giant looming overhead: Amazon.

Find me another Australian retailer that has kept Amazon at bay the way that Booktopia has.

Of course, this is not a sentiment I share alone. On Tony Nash’s LinkedIn post, comments from other leaders in the e-commerce industry poured in. “Booktopia is a great business, a business that has challenged and changed the book market in Australia and taken Amazon to task. How good is that!” wrote Julie Mathers, Founder and former CEO of Flora & Fauna.

“Booktopia is one of Australia’s real success stories. Sharemarkets go up and down but behind the brand, there is a solid retail and logistics operation with some great people,” wrote Gabby Leibovich, Founder of Catch and all-around e-commerce legend.

Hell, even Grant Arnott, the founder of Power Retail, shared his thoughts: “You’ve punched above your weight since 2004 and there’s nobody in our world not doing it tough in the current environment.”

Success in e-commerce isn’t smooth, and the road to success is long and bumpy. There’s no silver bullet (okay, no more cliches, I promise), and everyone in business knows that.

It’s natural that share prices go up and down – it’s the name of the game. As Nash said himself: “No one said being listed was easy… it isn’t, but it is the path we are on and I for one look forward to [seeing] how Booktopia continues to grow and succeed.”

All in all, I think that the media has been a little too harsh on Tony Nash and Booktopia. Sure, its share prices have been on a rocky road, but find me one pureplay retailer that isn’t undergoing challenges right now.

Look at the big picture: it’s a major success story in the world of retail, and in this current tumultuous landscape, there are other places to channel the ‘villain’ role.

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