Culture Minister Park Yang-woo visits local bookstore Dongyangseolim in Jongro-gu, Seoul, on May 13. (Ministry of Culture, Sports and Tourism)
Concerns of the publishing industry and local offline bookstore owners are rising, as Interpark Songin, a retailer to small and medium-sized bookstores, announced Tuesday that it has filed for court receivership due to mounting losses.
In 2017, e-commerce platform operator Interpark acquired a 56.2 percent stake in the book retailer, which at the time was under court receivership, for 4 billion won ($3.36 million).
Interpark said that it has since been working hard to normalize the business, while injecting 5 billion won through buying additional shares of the company.
Interpark Songin’s operating loss improved to 1.3 billion won in 2019 from 25.4 billion won in 2018. However, the company said, in part due to the spread of COVID-19, its operating loss during the first quarter this year reached 900 million won.
“We tried diverse measures to save the business. We also tried to create synergy with our online platform by providing online-to-offline bookselling services, but it was not successful,” an Interpark spokesperson told The Korea Herald.
Interpark added that it has decided to apply for court receivership out of concern that continuing its current operation would harm the industry as a whole. The book retailer, however, declined to disclose the specific number of bookstores and publishers that it has been working with.
On top of the spread of COVID-19, the decreasing number of readers affected the company’s business, Interpark pointed out. According to Statistics Korea, the average amount a person spends on books annually decreased by 15.6 percent from 13,108 won in 2015 to 11,069 won last year.
Interpark also claimed that the trend of people purchasing books mainly in large bookstore franchises also affected its financial situation. According to the Korean Publishers Association, the top three bookstore franchise’ sales increased 3.6 percent to 824.1 billion won last year from 795.4 billion won in 2018.
Interpark Songin’s difficulties will have repercussions in other sectors, such as publishing firms and bookstores, and the Korean Publishers Association on Wednesday organized a meeting with publishers and Interpark Songin. The Korean Federation of Bookstore Association also participated in the meeting.
“As an association, we see that our role is to gather publishers and make their voices heard. We are currently not sure about the overall amount but there could be some publishers that have money that they have to receive from Songin,” an official of Korean Publishers Association said.
“We can take actions on behalf of the publishers later but the publishers should speak out to establish the course of action that we should take. Some might blame Interpark’s management ability. Some might highlight difficulties in the industry. We need to listen to them first in order to tackle this issue.”
“Some bookstores will also be hit (by the Interpark Songin decision). This is why we were also included in the talks held by the publisher’s association,” an official of the Korean Federation of Bookstore Association told The Korea Herald on Wednesday.
“For instance, some bookstores have been receiving books mainly from Interpark Songin and they will have to quickly find new retailers. We just heard the news yesterday so we are preparing to find out how many bookstores will be impacted,” she added.
By Song Seung-hyun (email@example.com