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Booktopia secures new CFC

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By Published On: February 2, 20230 Comments

Booktopia has announced it has finalised a $12 million finance package to support the development of the company’s new Customer Fulfilment Centre (CFC) at South Strathfield.

Booktopia has announced it has finalised a $12 million finance package to support the development of the company’s new Customer Fulfilment Centre (CFC) at South Strathfield.

In August 2022, Booktopia announced it had secured the lease on the new building. According to the company, a number of years of high growth during COVID and an increase in inventory to meet the demands of customers has led to constant retrofitting of the Lidcombe facility, which was causing constraint on growth and efficiency.

The new CFC is a 20,000sqm clean skin facility with a custom-designed layout that will facilitate an efficient flow of product through the CFC and reduce manual handling. The space has capacity for an advanced, scalable, flexible robotics platform that will significantly improve put away and picking activities, as well as a future-proof design that supports further automation driving even more efficiency without major rework.

“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,” Booktopia Acting CEO Geoff Stalley in August.

According to Booktopia’s announcement, the company has established a $7 million trade finance facility with Australian non-bank lender Moneytech Finance Pty Limited (Moneytech) to assist working capital requirements while investment continues in the new CFC. The facility has an initial term of 24 months and is a first ranking general security agreement. The interest rate is the MoneyTech Base Rate (currently 10.2%) less 1.97%.
Booktopia has also established a $5 million short term unsecured debt facility with AFSG Capital1 to assist in funding the new CFC fitout pending refinance by a longer term subordinated debt facility. The facility includes funding from major shareholders Tony Nash and Steven Traurig and has a term of 180 days and an interest rate of 10% pa. The new CFC will support the efficient fulfilment of over 12 million units per annum with flexibility built into the design for further expansion whilst reducing labour costs per unit in the CFC.

Booktopia Chairman Peter George said completing the funding package was an important milestone for the business.

“The new CFC is critical to ensuring Booktopia can deliver industry-leading efficiency in the medium and long term,” he said. “The advanced robotics platform and future-proof design will ensure we can continue to evolve with changing technologies and deliver books in the fastest possible time at the lowest possible cost, well into the future.”

The new CFC is set to be operational by the second quarter of FY24 and is expected to deliver a range of operational efficiencies and improved margins compared to the company’s current facility at Lidcombe.

The news comes days after Booktopia announced its plans to deliver a $15 million earnings improvements with a series of cost cutting initiatives including the lay off of up to 40 employees.

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About the Author: Rosalea Catterson

Rosalea is the Editor of Power Retail. With a keen interest in consumer behaviour and tech, she covers everything ecommerce and hosts the Power Retail Power Talks Podcast.

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