About 1400 New Zealand jobs are at risk as administrators decide whether to shut down or salvage the country's largest chain of booksellers.
Whitcoulls, Borders and Bennetts bookstores are all owned by Australian company REDgroup Retail, which was put under administration on Thursday by its owner Pacific Equity Partners.
Voluntary administration varies from receivership in that it works to benefit the whole company, not just the creditors.
Together the three chains represent about a quarter of all bookshops in New Zealand, including 65 Whitcoulls and five Borders stores.
The chains operate about 260 stores and employ 2500 staff in New Zealand, Australia and Singapore.
Whitcoulls, which began under a different name in 1882, is New Zealand's oldest book retailer.
The administrators say REDgroup's future is very much up in the air with three main options - restructuring, returning control to the current board or shutting down altogether.
Ferrier Hodgson took over the running of the company on Thursday and spokesperson Michael Cave says its priority is talking to staff.
Mr Cave says the administrators will then organise a meeting of creditors and begin the process of deciding the company's fate.
The National Distribution Union represents some of the workers and says Whitcoulls has failed to tell staff about the precarious state of the company.
Spokesperson Robert Reid told Morning Report it is a relief to hear that administrators Ferrier Hodgson plan to talk to staff as a priority because Whitcoulls has not.
He says the union's main membership is at the Whitcoulls distribution centre in Auckland and those workers left their jobs on Thursday without any inkling this would happen.
Problem not industry-wide
Booksellers New Zealand chief executive Lincoln Gould says the situation across the Tasman is down to financial problems with REDgroup.
He says the collapse does not mean there is a wider problem in the industry.
Australia's Bookseller and Publisher Magazine says REDgroup owns about 30% of Australia's bookstore market and the impact will be big on both sides of the Tasman.
It is understood Ferrier Hodgson will try to keep the bookstores operating for at least another two weeks.
Former publishing executive Graham Beattie says he hopes the administrators can find a way to keep the stores running.
He says it would be a disaster if 65 bookshops in the country's main streets and malls disappeared.
However, he says the administrators will probably reduce the number of stores.
An equity analyst at Australian consultancy firm Fat Prophets, Greg Fraser, says as Pacific Equity Partners is a private firm it is difficult to establish what went wrong or how its problems will be resolved.
Earlier this week Borders in the United States filed for bankruptcy protection. It is not connected to the Australasian Borders.
