The bookstore business is on the verge of bankruptcy and collapse

The decline in offline sales of the print media and books, which occurred due to the pandemic and the closure of the stores, may reformat the book market beyond recognition. In the big cities, the flow of passengers in metro and on land modes of transport decreased, the flights were canceled. All this primarily affects the income of book networks.

Many of the representatives of this area has already sent the “letters of happiness” to their partners, informing them that transferring the money for goods that were sold in the first three months of this year, might not be possible.

Anatoly Shutka, the CEO of “Respublika” chain of stores told us that for today, the organization’s priority is to fulfill social obligations to the employees. The partners of a number of regional networks (“Prodalit”, “Meloman-Marwin”, “Amital” etc.) have already noticed the freeze of payments from the points of sale. More than a hundred stores turned to the suppliers with a request to wait, suspending payments. According to the experts, such delays can trigger a wave of non-payments throughout Russian retail. In this case, the epidemic effect will affect the publishers first, and then printing houses, paper suppliers and the authors.

Even in the cases, where the situation does not seem so hopeless, publishers begin to mentally prepare for a sharp decline in profitability.

For example, the “Chitai-Gorod-Bukvoed” book network, which has common co-owners with the “Eksmo-AST” publishing group, and, therefore, seems to be unlikely to wait for problems of the partner non-payments, is preparing for even worse situation. According to the company’s CEO, Mikhail Ivantsov, the company will be forced to suspend investments in most of the previously prepared projects.

According to the forecasts of “Eksmo-AST” publishing house specialists, the current development of the situation will inevitably lead to a 75% reduction in revenue for March. The losses for four months can make up about a quarter of the annual revenue.

The industry was also affected by the growth of foreign currency, and accordingly, by the increase in the cost of production of the printed matter itself, since it requires imported coated paper. Considering that printing houses and publishing houses will stop their work in the nearest future, the book market, as well as the print market, may be on the verge of collapse.

One of the possible ways to save the industry could be the move of publishers to the online trading area. However, in most cases, the book market accounts only for 10% of the total sales for the online trading and does not seriously reach the volume that was traditionally characteristic of offline purchases. The compensating for losses through e-commerce proved to be very problematic for the area.

The only thing, for which the shops still record an increase in demand, is the literature on epidemics. However, such sales are just a drop in the ocean of losses. And although the publishing business has already turned to the Government of the Russian Federation with a request for help and support, according to forecasts of the experts from “Eksmo-AST”, this will not be a help for a half of the bookselling enterprises.