Major Bookstore Chain Closes Down

By 11 May 2017

A major crisis for the Croatian book publishing industry.

Some of the largest bookstores in Croatia, operated as part of the Algoritam MK company, have closed their doors and have stopped selling books. In about thirty-five bookstores, there are now thousands of blocked books made up of various Croatian publishers and Algoritam MK has not paid them millions of kuna, reports Večernji List on May 11, 2017.

It all began on Friday, when one of Algoritam MK’s creditors decided to force a payment of its debts and froze the bank account of one of the country's largest bookshop chains. Later, some other publishers did the same and the collapse of the company was unavoidable. Since Algorithm MK is not creditworthy due to credit problems, it was not able to quickly raise the money, so it has ceased business operations.

The alarming situation in the Croatian bookselling sector prompted the Publishers and Booksellers Association to react. It informed the competent ministries and announced that publishers would request the return of their books unless the situation is immediately normalised. If they open their doors again, Algorithm MK bookstores will not be able to sell books and other products produced by members of the Association.

According to unofficial sources, Algorithm MK owes some major publishers half a million kuna each, an amount which could lead these publishers into major business problems. Školska Knjiga, VBZ, Znanje and Narodne Novine are reportedly interested in taking over some of the bookstores which Algorithm MK is ready to give up. Mozaik Knjiga, as the owner of the shelves in the stores which would be taken over by the other chains, would not claim the shelves or seek compensation for their use for a certain time.

In any case, some Croatian towns are now left without a single bookstore, and some of the most popular bookstores in Croatia have been closed down, including the one at the Dubrovnik Hotel in Zagreb and the large bookstore on Bogovićeva Street.

Today, a new meeting of the Publishers and Booksellers Association will be held in order to agree the next steps which should be taken to strengthen the shaken publishing and bookstore industry. In any case, what Agrokor is for the Croatian food and beverage industry, Algoritam MK is for the Croatian publishing industry. Will the government also protect publishers, as it has tried to protect food and beverage producers?