Competition Authority moves after Eason's acquires rival
The Competition Authority is investigating the acquisition by book retailer Eason of rival book wholesaler Argosy signed by the two companies on August 27th.
The competition body is contacting businesses in the book trade seeking information to understand how the industry works and to see if there are concerns about Eason’s takeover.
Eason’s purchase of Argosy Libraries Limited has caused a stir in the book trade as news of the deal spread yesterday.
The acquisition gives Eason’s a dominant position in the industry, making it in effect the country’s only nationwide book wholesaler as well as the largest book retailer.
Fergal Stanley, managing director of Argosy, wasn’t in a position to comment last night. The shareholders of Argosy are Fergal, Mary and Lucy Stanley.
Eason’s declined to comment last night.
One business in the book trade, which declined to be named, received a detailed questionnaire from the Competition Authority asking questions including details of how many books they buy from publishers and book wholesalers.
The business was asked about the effect of the growth of sales in supermarkets such as Tesco and whether it had used wholesalers in Northern Ireland or the UK to buy new books by Irish authors.
Eason’s reported an 11 per cent decline in revenues to €266 million for the year to January 2012 and losses widening to €5.3 million on exceptional charges relating to writedowns in the value of property and redundancy costs. The retailer has embarked on an ambitious €20 million investment to grow the business at a time of declining book sales and the growth of online sales of books and e-readers such as Kindle.
The retailer is closing loss-making stores and exiting under-performing businesses in South Africa and Britain. It is also expanding its franchise outlets from 22 to 33 stores by 2015.
Argosy made a gross profit of €2.5 million and an operating profit of €84,000 for the year to January 2011, the most recently filed accounts show. Retained profits at the firm totalled €1.8 million at the end of that month.