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IRUK Top500 The Customer Report: 2018

IRUK Top500 The Customer Report: 2018

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OFT to probe Amazon's acquisition of The Book Depository

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Amazon.com has announced that it will acquire Gloucester-based online bookseller, The Book Depository   International. The move will greatly reduce Amazon’s competition in the market, boost its international reach, and add over six million titles to its already vast stock of books.

However the Office of Fair Trading (OFT) is investigating the acquisition, and trade body The Booksellers’ Association has announced it will formally oppose the deal. It’s thought the Publishers Association is also actively considering opposing the deal. The OFT investigation will be the largest the bookselling industry has seen since the government body probed Waterstone’s takeover of Ottakar’s in 2006.

The price Amazon is paying for The Book Depository has not been revealed although a price tag of around £100m has been mooted by industry experts. It is unclear whether TBD will retain its individuality and continue to operate as a separate website, or if its operation will be integrated into Amazon.com.

The Book Depository reported in January this year that it expected to achieve £120m revenue by its year-end in June. In June 2010 it reported sales of £69m and an operating profit of £2.3m. Two-thirds of its £69m sales come from overseas.

Amazon has an internationally focused website in the UK and the acquisition of The Book Depository should allow it to increase its exposure in the European market. Another benefit of the take-over is that TBD is rapidly growing in Australia due to its low prices and free shipping.

Tim Godfray, CEO of the BA, said high street bookselling is already facing increasing pressure from online bookselling. He told The Bookseller magazine: "We in the book trade need to be ever-mindful of the fact that high street retailers cannot survive as showrooms for internet retailers indefinitely. We urge anyone with an interest in this matter to make their views known to the OFT."
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