Whitcoulls administrators prepare for creditors meeting

Administrators of the Australian parent company of New Zealand bookseller Whitcoulls are beginning preparations for a first meeting of creditors.

REDgroup Retail is the parent company of Australasian book chains Borders and Whitcoulls, which were put in administration yesterday.

REDgroup -- which manages operations in both countries -- called in voluntary administrators, Ferrier Hodgson.

REDGroup is controlled by private equity group PEP.

"We have only been in there less than a day and are still gathering information about what has gone on there, so there's not much more we can say at this stage," the administrators' spokesman Michael Cave told NZPA.

Ferrier Hodgson partner Steve Sherman said in a statement that as far as possible it would be business as usual while the administrators conducted an urgent assessment of the business's financial status and prepared for the first meeting of creditors.

The meeting was expected to take place in the first week of March.

But staff in New Zealand are asking what administration will mean for them as they had not been told anything by their employers, National Distribution Union general secretary Robert Reid said.

"It takes a while to understand, as these things flow down, what impact they will have on each level. We are not happy with how this has been handled by the company.

"The company has been very obstructive in pay negotiations and instead of being open with us and their problems, they have been playing hard ball and acting like an anti-union company."

Mr Reid told NZPA the next step would be to track down a representative of the administrators to find out what the move would mean for New Zealand staff.

The separately US-owned Borders chain also collapsed this week but is not linked to the Australasian chain.

New Zealand's Whitcoulls chain comprises of 65 stores, 40 of which are located in Auckland, Wellington and Christchurch, according to its website.

It was first established as Whitcombe and Tombs in 1888 and merged with Dunedin office supplies company Coulls Somerville Wilkie in 1971.

"This is just another tragedy, which reminds me very much of Feltex," Mr Reid said. "It's an iconic New Zealand company being bought out by a private equity company, becoming completely indebted and this is the result that we see. It's tragic for the workers and the New Zealand company that has been built up over the years.

"We are telling our members that we are working as hard as we can to find out what this means for them. Those on the distribution side at least are entitled to redundancy and other provisions," Mr Reid said.

Booksellers New Zealand chief executive Lincoln Gould said there would be grave consequences as Borders and Whitcoulls were an important part of the industry.

"We just hope they don't start closing doors, it would be an impact for publishers, consumers and it would be very sad. There are obviously hundreds of other bookshops, it would not be a terminal problem for the book industry, but it would be of grave consequence," Mr Gould told Radio New Zealand.