Online book retailer, Booktopia, recorded a 12 percent increase in its share price on Monday morning. What has driven this uplift, and is it here to stay?
The online retailer, Booktopia, recorded a 12.06 percent increase in its share prices on Monday morning, lifting from $0.29 a share as its most recent close to $0.32. The online book retailer’s share prices have certainly seen better days, following an 87.64 percent loss compared to last year. So, what’s driven this increase, and is this the start of a way up for the retailer?
On Monday morning, Booktopia announced it would be opening a new customer fulfilment centre in Sydney’s west to drive further online growth. This comes as the lease for its Lidcombe FC is nearing its end, and the business’ growth requires a larger space. Moreover, its lockdown-fuelled increase in sales has further grown its inventory levels, resulting in the business retrofitting the FC to accommodate the growth.
“A number of years of high growth during COVID and an increase in inventory to meet the demands of our customers has led to constant retrofitting on our Lidcombe facility to a point that it is now a constraint on our growth and efficiency,” the business said in an ASX update.
The new 20,000 sqm centre is expected to be completed by the Christmas period in 2023. Booktopia is currently finalising its financial package to support the $14 million investment in new equipment – these are expected to roll out in FY23 and FY2. This new FC will include picking robotics, ‘future-proof’ designs to support automation, and a ‘custom-designed’ layout to improve efficiency and reduce manual handling.
“We continue to see opportunities for growth in the Australian book market, and 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 Acting CEO, Geoff Stalley. “The new CFC re-shapes our supply chain and unlocks a sinifcant opportunity to increase profitability and generate cash with a purpose-built design that is efficient and scalable.”
There has been plenty of doom and gloom in the e-commerce space in the last few months. Is e-commerce dead? Has the bubble burst? The ongoing tumultuous rollercoaster ride that is the ASX E-Com index would certainly have you believe so. And things haven’t been pretty rocky for Booktopia of late, too. In the last six months, its share prices have shed 72.6 percent. Its founder, Tony Nash, stepped down from his role as CEO in May 2022 before being ousted from the board in July following an internal business review.
Booktopia CFO, Geoff Stalley, has since been named the Acting CEO of Booktopia until the business can find a permanent replacement. Since the news broke, its shares have remained somewhat steady, wavering slightly. However, with the promise of growth and the need to expand on its current fulfilment capabilities, Booktopia may be on its way to a stable recovery.
The e-commerce landscape is changing. With a Power Retail Switched On membership, you get access to current e-commerce revenue and forecasting, traffic levels, average conversion rate, payment preferences and more!