…and if that means naff all to you then that is simply a sign of how unsuccessful this venture capital business was in reaching beyond the core (and profitable) business of independent bookselling. Fuelled by cheap loans against the diminutive assets of two High Street shops, this company has become another casualty of banks withholding their investors and savers cash from people who forget the golden rules of borrowing that they were likely never taught in childhood: if you want it, save for it (also known more generously in business school as: Never Borrow More Than You Can Repay).
Venture capital is of course no more than popular parlance suggests: asset stripping. Using two independent High Street bookshops to underwrite the heavy investment required to get a new media Web 2.0 corporation built from scratch to world domination was always going to end in tears. Unfortunately, those who knew better and who were recruited or bought in with their expertise did not listen to the very staff who now find themselves out on the street without (a) being served notice of redundancy and (b) their March pay cheques.
ArgentVive has been put into administration and the staff are still awaiting to hear not only if they will have jobs to return to in the next few weeks (they can’t claim any benefit until they are officially notified one way or the other) but whether or not they will be paid for work already done. There are several parties interested in buying the shop because – good news – Methvens Booksellers has not only been profitable but despite receiving no new stock since January 1st has continued to enjoy support from a broad, loyal customer base. Methvens Booksellers in Worthing may yet be lucky (and the support building on Facebook since the announcement on March 23rd suggests a canny investor could cut themselves a very good deal). Other bookshops will not be lucky in the coming year and I’m sure that even the large bookchain, Waterstones, will be looking at the closure of some under-performing branches.
There is trouble ahead and not just for the affected, hard-working staff caught-up in each closure. Bookselling is not like other highly-skilled sales jobs: there is no commission. Employees, usually trained to graduate-level, work for standard retail pay in an industry they love, sharing that passion with customers and over time, forge strong links with local communities. Methvens Booksellers has over the years, for instance, provided invaluable assistance to local schools in advising teachers about the resources available to teach children. Methvens Booksellers in Worthing has not only supported the launch of books by local independently-published authors but independent publishers too.
The closure of independent booksellers is often dismissed as a necessity of the free-market forces of capitalism but when profitable bookshops are being put into administration something is surely amiss. And what then happens when allied industries are no longer able to support publishers? Will publishers then belatedly review their links with Amazon and the large supermarkets? The vast majority of regular readers – both fiction and non-fiction – do not read books ‘written’ by celebrities but instead read a vast range of lesser known works that are the proverbial bread-and-butter for publishers large and small. As a publisher, relying on getting your book – your product – seen by potential customers through Amazon’s recommendation (other customers who bought this, also bought this and blah) is absurd if you wish to produce sustainable profitability. You could argue that the reason potential customers are browsing that particular book on Amazon in the first place is because it was seen in a bookshop.
Beyond this, the publishing industry simply could not cope without a steady drip-feed of the talent nurtured in bookshops entering its ranks.
As a publisher, do you think you can rely on potential growth in ebooks? Think again. I know of very tech-literate people who have bought a Kindle and/ or an eReader of the type sold in Waterstones. The Kindle was sold on by one friend after just two weeks; another’s eReader lies dormant (because ‘…the page-turn just doesn’t feel right.’ Well, who knew?) Booklovers love books and that means browsing, that means holding a solid book in your hands, that means holding on to the profitable independent bookshops that we have left and to do that…
…requires responsible investment and not the crass pillaging nonsense that was demonstrated by ArgentVive’s private equity asset-stripping backers.
James Pearson, staff member at Methvens Booksellers in Worthing, had this to say in The Bookseller magazine about the shop being put into administration and the effect on the staff.