Mark Rubbo from Readings Books on what it takes to create and sustain an iconic business, and why handing over was harder than expected.

[00:00:00] Hi, it's Michael Kerr here presenting Small Business Banter.

[00:00:05] Welcome to the Small Business Banter podcast. I'm Michael Kerr your host and I'm also the founder of Kerr Capital where I work day to day with business owners.

[00:00:21] The Small Business Banter podcast is built just for business owners and will be especially relevant if you're an owner looking to sell, if you've been unexpectedly approached by a potential buyer or if you're an aspiring owner about to buy a new business.

[00:00:37] There's a lot on the line personally and financially. It's stressful, it's emotional and it's usually in new territory.

[00:00:45] So to help each episode of Small Business Banter is a discussion between me and another business owner or an experienced Small Business Advisor. We talk about their experiences.

[00:00:58] So what you'll get is practical real life advice, different takes on everyday problems and a renewed confidence to tackle your own business challenges.

[00:01:15] Music

[00:01:24] Welcome into edition number 139 of the Small Business Banter podcast. I'm really chuffed to be sitting next to Mark Rubo today.

[00:01:34] Mark was the founder and still part owner of Readings Books. Welcome in Mark.

[00:01:42] Thanks Michael. It's great to be here to chat to you. I should add I'm not really the founder of Readings because the founder was Ross Reading and following on from Small Business Banter, I bought that business.

[00:01:57] Yes, you did. No, that's true. And you exited a music business called Professor Longhand.

[00:02:05] I did start that up. To take on the book industry. It's been on the landscape of Melbourne for so long and there are so many accolades for what you've done and what the business has achieved.

[00:02:18] So yes, thank you Ross. And his wife Dot. And also Peter Read who is another one of their partners.

[00:02:29] It's kind of had a similar name. All right, so what we're going to chat about Mark, it's great to have you in having run Readings now for such a long time and for it to be such a particularly the Ligon Street store is a part of the Ligon Street experience

[00:02:50] and has been for probably 40 years. But we're going to chat about your experience growing that business to where it is today. You've last year you exited on a day to day basis.

[00:03:07] Although I did see you pre Christmas behind the Tilt selling books, which means you die hard. But we'll cover some of those things but just I'll get you to tell us a little bit about your career.

[00:03:22] But I want to on your behalf to just appeal off a couple of things. You were described a couple of four, five years back as a pivotal figure in Australian book selling and one of the world's great booksellers which is quite something.

[00:03:45] But your achievements to the business but also to the literary community and the book publishing industry has been is renowned. So I think currently chair of readings.

[00:03:59] The boys.

[00:04:00] Past president of the Australian Booksellers Association founding chair of the Melbourne Writers Festival. You played a crucial role in Melbourne being designated a UNESCO city of literature.

[00:04:14] The Carlton Bookshop was named International Bookshop of the Year by London Book Fair in 2016. You've been involved with the Wheeler Centre and the Indigenous Literary Foundation and awarded the prestigious Lloyd O'Neill Award for Distinguished Service to the publishing industry.

[00:04:33] So that's quite a list all well earned and done with a lot of humility I think from my time with you. So could you just tell us your highlights from that long list and talk about where readings is because I want to start with that business that's been around so long?

[00:05:00] Yeah thanks Michael. Listening to that list is quite a bit surprised. I came into business accidentally it was never my intention.

[00:05:13] So you didn't do a strategy course on how to buy a business and grow a business?

[00:05:17] I did not. I was a very bad student at Melbourne University. I started off doing medicine. My father was a professor in the faculty and after the first few years one of his colleagues rang up and said the results are coming out tomorrow but I thought I should forewarn you that your son has failed every subject.

[00:05:41] So I then started doing arts course majoring in politics and economics so I was interested. Maybe thought I might go into journalism or something like that. I was interested in writing.

[00:05:54] And I got a part time job they had a very very good bookshop at Melbourne University which obviously sold textbooks to students but it was a really good general bookshop.

[00:06:03] I got a job there and they had a record bar up in the mezzanine and that was run by a gentleman who to me seemed very old, Mr McCarthy.

[00:06:18] Mr McCarthy didn't know much about contemporary music and I thought I did. So I got really involved in that. I think it was quite good. I sort of had a feel for what people might want and what the new trends were.

[00:06:35] What time frame was this Mark?

[00:06:38] My first big punt I remember buying was an album by an English band called Jethro Tal called Zika's a Brick. I can't remember how many copies I ordered but Mr McCarthy was shocked.

[00:06:55] But we sold them all and so then I thought I'm quite good at this and a shop became vacant in Ligon Street.

[00:07:04] And I thought there was no record shop in Ligon Street. Ligon Street that was becoming this sort of cultural hub of Melbourne.

[00:07:13] There was Lama Theater, the pram factory was going. There was an independent cinema. There were small cafes and boutiques.

[00:07:23] Opening up as a real sort of vibrant hub and it was a great time. The music, the new music, Wailers, Dylan was on top of his form all these new bands.

[00:07:37] So I thought I'd open a record shop and I borrowed some money from my mother and opened it and it proved to be quite successful.

[00:07:45] That was physically opposite where the current day?

[00:07:49] It is. My professional life I've stayed fairly close to my roots.

[00:07:58] So yeah, I ran that by myself for a couple of years and then I started working with a guy called Greg Young who had a record shop in South Yarra called The Record Collector.

[00:08:10] We used to bring in records from overseas together to cut down costs.

[00:08:18] And one day I said to him, oh look I'm getting a bit bored working on my own. He said, oh do I'll buy you out?

[00:08:27] And I thought he was a canny little businessman. I thought if he thinks I'm worth buying out maybe I shouldn't.

[00:08:35] So I said no and he said well do you want to go into partnership?

[00:08:38] And he'd found out there was an electrical goods shop up for sale in Hawthorne that had a little record bar and he said we could buy that.

[00:08:46] And he also said I know this other guy who's selling records at La Trobe University and he might come into this business.

[00:08:55] So that's, I did join forces with Greg and Steve Smith and we took over the shop in Hawthorne and that was successful.

[00:09:07] So I was still called Professor Longhears and then we changed it. Kept Greg's shop's name The Record Collector.

[00:09:15] And then around about 1976 Ross Reading who I'd become very friendly with he owned the bookshop down the road came to me and said oh my wife and I want to move to the country.

[00:09:29] Early tree changes.

[00:09:33] And he said yeah, build a mud brick house and grow organic almonds I think they were going to do. Do you want to buy the bookshop?

[00:09:43] And the rest is, let's say history so we raised the money from my family and Greg's family to buy the business.

[00:09:53] We didn't have anyone to advise us. They told us what the price was and there was quite a lot in those days.

[00:09:59] This is $76,000 or $50,000.

[00:10:02] Well it would have been a significant investment in those dollars at that time.

[00:10:10] And it seems to be the way and we've done some work together and in the book industry it's not dissimilar to some other industries where a lot of the sales go on between the existing owners

[00:10:28] and they knock on and say like I'm ready to move on. I'd like it to go to a good home and it seems to be a bit of a pattern.

[00:10:38] Yeah I think for the independent bookshop.

[00:10:41] Well in hindsight Ross showed great faith in trusting me to take on his business.

[00:10:48] Sadly later on the almond farm growing didn't work out and his marriage didn't work out.

[00:10:55] I think he probably regretted his decision. It was too late by then.

[00:11:02] So that was in 1976 and it was just an incredibly exciting time.

[00:11:10] Because there hadn't really been an Australian publishing industry before. There had been some but it was sort of a cottage industry and sort of the big publishing was more in those sort of coffee table pictures of Ares Rock and that kind of thing.

[00:11:28] But serious writing and serious books about ideas and how Australia could be a better place and more interesting.

[00:11:36] That hadn't been really done.

[00:11:42] So you got a sense that that bookshop was on that wave in promoting ideas.

[00:11:48] Yeah we came in that cusp. There was around the corner from us there was two young women Hillary McPhee and DiGribel who had started up their own independent publishing company called McPhee Gribble.

[00:12:02] Mori Schwartz who now as many of you listeners might be aware he owns the Saturday paper and the monthly magazine.

[00:12:11] He and some friends had started up a small publisher called Outback Press.

[00:12:16] And there's also at Penguin which was a UK owned.

[00:12:21] A guy had just started his publishing. His name was Brian Johns.

[00:12:26] And Brian was a journalist and no publishing experience so it was a great.

[00:12:32] Everyone thought this was outrageous that they bring an outsider.

[00:12:36] But Brian was absolutely passionate about Australia and Australian writing.

[00:12:42] And he was sort of like a catalyst.

[00:12:49] Penguin started to publish a whole lot of books but he also supported his competitors.

[00:12:57] It was amazing. He became really close to Hillary and Di from McPhee Gribble.

[00:13:02] And when they were in trouble he gave them a lifeline through Penguin.

[00:13:06] And so readings was sort of part of that and Colton was that cultural hub.

[00:13:12] There still is but there was a pub around the corner called Stewards.

[00:13:18] And every Friday night Brian Johns, every writer who was in town in Melbourne, Hillary and Di McPhee, Di Gribble would all go to Stewards for drinks on Friday nights.

[00:13:32] And it was just a very exciting time. I got to know all the writers, got to know the publishers.

[00:13:42] And readings sort of seemed to be that sort of the public face of that new movement in Australian writing.

[00:13:50] Yeah it was sounding extraordinary.

[00:13:53] And I sort of seized it. I just sort of loved it.

[00:13:56] Yeah.

[00:13:57] And also the books sold. I do love retailing. I like it.

[00:14:04] Well you had a track record with Professor Long here selling, picking what's going to sell and then backing yourself.

[00:14:15] But also you still had to go and borrow a fine 50 grand at the time.

[00:14:20] And I suppose you had a bit of a track record with your parents by that stage.

[00:14:25] And others to say, well I'm now shifting to the book industry.

[00:14:31] And it sounds like the environment was rich and fertile as a good timing is often such an important factor.

[00:14:40] When we bought the business we changed the shops all the names to readings and added books to the mix.

[00:14:47] And music became less and less important.

[00:14:51] And yeah I just loved that industry because...

[00:14:55] So was it, you switched out of medicine to go into arts?

[00:15:00] Yeah.

[00:15:01] And arts course. And so that wasn't such a leap then if you were really into exploring ideas and...

[00:15:08] No, it sort of fitted very nicely.

[00:15:12] I kept thinking about you know you're backtracking out of medicine and your parents going what are you doing Mark?

[00:15:19] My father was the most disappointed. Sadly he died before I started.

[00:15:25] Started Professor Long here and I would have liked to have shown you that I wasn't a tailor.

[00:15:31] My mother was always terribly supportive.

[00:15:33] When I started Professor Long here I said, I think I needed $10,000.

[00:15:37] I said mum can you let me do it?

[00:15:40] And she said I paid her back quite quickly.

[00:15:43] Yeah it sounds like you had a knack and you knew the straight and you knew a lot of the players.

[00:15:48] It's a very different like on street now.

[00:15:51] It is culturally. There's still elements of it.

[00:15:55] I think one of the things that made Ligen Street so vibrant was its proximity to Melbourne University.

[00:16:03] There's not many places in Australia that have that kind of proximity to a very significant educational institution.

[00:16:13] Yeah it's a block walk. It's two blocks.

[00:16:15] A block away yeah.

[00:16:16] Yeah, a short walk.

[00:16:18] And that sort of helped.

[00:16:20] I always thought it was probably one of the best places to sell books in Australia.

[00:16:25] Yeah.

[00:16:26] Because you had that and people were adventurous and they're excited.

[00:16:31] Yeah.

[00:16:32] So what readings today has gone way beyond the Colton Ligon Street store?

[00:16:39] So what's the snapshot of readings today in terms of where you're located and...

[00:16:49] I was always fairly ambitious for readings.

[00:16:56] It was probably not necessarily an ambition that my partners shared.

[00:17:05] I'm not sure.

[00:17:08] Because with the way it was then structured as I looked after the books and then Steve looked after the music,

[00:17:14] Stephen Brad looked after the music.

[00:17:16] And it was sort of hard for them because the books became more important and the music became less and less important.

[00:17:22] So it was a difficult, must have been difficult for them.

[00:17:26] Yeah I guess the two different markets were growing at much different.

[00:17:31] Music was probably reasonably well.

[00:17:34] It was quite dynamic when we first started and then Vinylwoodhound and CDs came in.

[00:17:40] Yeah.

[00:17:43] And then of course streaming came and it was killed.

[00:17:46] Yeah.

[00:17:48] Although it's funny it's way back in different ways.

[00:17:51] In different ways but it's not certainly on a retail.

[00:17:56] Not unless at second hand.

[00:17:58] That's right.

[00:17:59] It's definitely expensive.

[00:18:01] So I was ambitious for readings and we started to experiment.

[00:18:09] We bought a shop in Malvern.

[00:18:11] Because that was number two?

[00:18:13] Yeah.

[00:18:14] We had Hawthorne, South Yarra and Carlton.

[00:18:18] In Carlton we had the record shop and still had the record shop and the book shop they were still separate.

[00:18:27] And then we decided to open a shop in Port Melbourne.

[00:18:36] And then I was in St Kilda one day and walked into a very nice book shop called Cosmos.

[00:18:45] I knew the owner and I went in with my wife and Jack the owner called down from the mezzanine

[00:18:51] and said, Mark I need to see you.

[00:18:55] And as you know Michael he Jack wanted to see me about selling his business to me

[00:19:01] and you gave me some great advice and assistance in that process.

[00:19:10] So yeah steady increase.

[00:19:12] There was no great strategy.

[00:19:14] I think there was a lot of it was opportunistic.

[00:19:18] But I think we sort of started to be more strategic in our thinking and looking.

[00:19:25] The other thing was online.

[00:19:28] That was we set up a website in 1995 so a long time ago.

[00:19:35] Sort of anticipated that never quite successfully.

[00:19:40] The other thing I did was I used to go to America quite a lot to buy books.

[00:19:46] And I'd go there and I'd see all these great sort of independent book shops

[00:19:53] with suddenly going out of business because this shop called Borders would open up across the road from him.

[00:20:01] And I knew that Lige and Street that was where we all our sales really came from.

[00:20:08] You were so high profile and still energy.

[00:20:11] Yeah and I knew we were in a small shop there.

[00:20:16] I said if we don't have a bigger offering someone's going to come in and we're going to be annihilated.

[00:20:26] And I kept on trying to find alternative premises and fortunately for us and unfortunately for a lot of people

[00:20:34] the State Savings Bank of Victoria went under.

[00:20:40] And their sort of carcass was bought by the Commonwealth Bank and suddenly the Commonwealth Bank had two branches in Lige and Street.

[00:20:48] And they decided to consolidate and move one of the branches into this very nice size 400 square meter shop.

[00:21:01] They were suddenly available and they decided to sell it.

[00:21:08] And I just knew we had to get that shop.

[00:21:12] And I didn't know how we'd financed it.

[00:21:15] In those days you could there was a loophole in the Superannuation Act that you could borrow in your super fund.

[00:21:24] Right.

[00:21:25] So what year?

[00:21:27] This is 1997 and Steve and I had some super and Greg had super.

[00:21:35] So I said to Steve and Greg we've got to do this.

[00:21:39] And Greg wasn't interested at all.

[00:21:42] So Steve was to his credit and we had about $500,000 between us.

[00:21:52] And we managed to get bank and we got the building.

[00:21:57] Yeah.

[00:21:58] That was a life saver because as I was my forecast about someone coming in.

[00:22:04] To smack on.

[00:22:08] Not too long later.

[00:22:09] Not too long.

[00:22:10] So we moved in 1998 and that was very exciting because suddenly I mean we'd always struggle with cash flow.

[00:22:19] You had a lot of money tied up in books.

[00:22:21] A lot of money tied up in books and probably didn't manage our inventory as well as we could.

[00:22:27] And it was always a struggle to find money to pay credit.

[00:22:32] We also had a silly structure at Wizard Trust and under those days at Trust you had to distribute all the profit you made.

[00:22:42] And if we did that.

[00:22:44] You couldn't put it back in again.

[00:22:46] Well you couldn't put it back in.

[00:22:48] Yeah, you had to look.

[00:22:50] And you had to pay tax on the profit that you distributed which you didn't get.

[00:22:54] So we turned it into a proprietary company which is much better you pay tax on whatever.

[00:23:01] Yeah.

[00:23:02] And you could retain your profits and so suddenly we had money which was the first time we'd ever done that.

[00:23:10] But you also, was that like your thinking on buying the building in a retail business?

[00:23:16] How vital was it?

[00:23:18] Or how much of a consideration was it?

[00:23:20] We're at least whatever comes at us.

[00:23:23] We own our digs and we can, we're here for as long as we need to be.

[00:23:30] Was that a...

[00:23:32] Yeah I wanted to, I think I wanted the security.

[00:23:35] Because one of the things when we first took over readings is to say we weren't that good at managing our inventory.

[00:23:42] And we had a couple of years where I'd made some terrible mistakes.

[00:23:46] And we'd had to borrow and get overdrafts and I said,

[00:23:50] and I never wanted to be in that vulnerable position again.

[00:23:54] So owning the building and have that security was quite, to me, quite important.

[00:24:00] Yeah.

[00:24:01] I think for a lot of retail businesses because landlords can,

[00:24:08] they own their properties to make rent.

[00:24:12] But that underpinning security, you know,

[00:24:18] it kind of affects the way you go about running, or can affect the way you run the business.

[00:24:23] Maybe not thinking as long term as you should.

[00:24:27] Because you've got a five year lease or a shopping centre.

[00:24:32] Well it's given us I guess the courage to...

[00:24:35] So we did a, obviously fitted it out when we moved in 1998.

[00:24:39] And then it was starting to get tired and then two or three years ago we decided to do another fit out which I'm absolutely thrilled with.

[00:24:49] Yeah.

[00:24:50] And that, you know if we'd been renting probably wouldn't have had the courage to do that.

[00:24:58] So, yeah so as I say, so that was a fantastic move.

[00:25:03] And for a few years we had money to invest so we were able to buy the St Kilda shop.

[00:25:10] We didn't have to borrow money.

[00:25:12] We were able to open up the shop in Port Melbourne.

[00:25:15] We didn't have to borrow money for that.

[00:25:19] So it was an exciting time.

[00:25:21] We could afford a van for the first time.

[00:25:24] A proper van that...

[00:25:26] With your own name on it?

[00:25:28] With our own name on it.

[00:25:30] So that was exciting.

[00:25:32] We sort of computerised to try and better manage our inventory and things like that.

[00:25:39] So you had a couple of shareholders and did you have,

[00:25:43] was there a governance structure as in the directors or shareholders would meet and talk about strategy as well as...

[00:25:52] Because you were CEO, right?

[00:25:55] Basically CEO.

[00:25:57] Sort of. We did have a CEO for a couple of years which didn't work out terribly well.

[00:26:03] Yeah.

[00:26:06] And that sort of finished...

[00:26:09] Before that had just been me and three sort of Steve, three guys sort of...

[00:26:14] Oh so they were also day to day involved.

[00:26:18] Yeah.

[00:26:19] You did a lot of stuff on the fly as you were running this.

[00:26:22] Yeah that's right.

[00:26:26] So in hindsight it would have been better to have drawn on some sort of professional advice

[00:26:33] or even to have done some professional development I didn't do.

[00:26:36] I didn't have any training or anything like that.

[00:26:43] Hi there.

[00:26:44] This is a quick interruption to the podcast and it's a message from Kerr Capital,

[00:26:48] a supporter of the podcast.

[00:26:50] If you're a business owner thinking about selling and you're unsure about what you should do,

[00:26:55] well the worst thing you can do is jump straight into an unprepared business sale.

[00:27:00] Cross your fingers and hope for the best.

[00:27:02] If you want to take control, get a sense of what your business is really worth

[00:27:07] and a plan to make it more sellable then head over onto the Kerr Capital website.

[00:27:12] Check out the value and sellability diagnosis.

[00:27:15] If it piques your interest, contact me, Michael Kerr,

[00:27:18] or book one of the three 45 minute diagnostic calls.

[00:27:22] Now let's head back to the podcast.

[00:27:27] Yeah you're in a business that you're in the business because you loved books

[00:27:32] and what the industry was able to achieve but yeah then...

[00:27:37] One of the things I found is that I got bored quite easily

[00:27:42] and so that would result in, oh let's try this.

[00:27:48] Shiny object syndrome?

[00:27:51] Yeah it was pretty much.

[00:27:53] And not being comfortable with it's okay, don't mess with it?

[00:27:59] We were a very early adopter of IT to computerise.

[00:28:05] I became obsessed with that.

[00:28:09] And then the other thing, I also became involved in the industry

[00:28:14] because I liked it a lot and that was incredibly useful

[00:28:17] and I sort of recommend anyone in small businesses to get involved in your industry

[00:28:23] because it benefits you reap just what contacts you make.

[00:28:30] The shared learnings?

[00:28:32] Yeah and also to find out that actually the problems that you have

[00:28:37] aren't unique to you and you can learn things from people.

[00:28:42] Early on we had a sort of loose buying group.

[00:28:48] We called ourselves the independent booksellers of Victoria

[00:28:52] and it was about five or six shops and we'd buy books together

[00:28:59] to get extra better terms and that was good.

[00:29:03] But the benefit of that was that you shared knowledge

[00:29:08] and got to know people.

[00:29:11] And yeah I was always learning and trying to find new things.

[00:29:16] I went to a booksellers conference in Brisbane in the early 80s

[00:29:21] and Brisbane at that time was a very conservative backwater

[00:29:26] run by this very right wing Premier called Joe Belke Peterson.

[00:29:33] It was a corrupt, failed state but I went to Brisbane

[00:29:39] and I went speaking to a guy there who ran the local university press

[00:29:44] and he was telling me, oh we have these readings at the university bookshop

[00:29:50] and 100 and 200 people come.

[00:29:53] And if they can do that in Brisbane,

[00:29:56] imagine what would happen in Melbourne.

[00:29:58] I brought that idea back to you.

[00:30:00] That was a spark. It came out of somewhere unexpected almost.

[00:30:03] Yeah, yeah.

[00:30:05] So I came back and said oh I'm going to do that

[00:30:09] and there was a theatre around the corner in Fitzroy from where we are

[00:30:17] and I knew the owners vaguely and I said oh can I use your theatre?

[00:30:23] That's where that started.

[00:30:27] And that sort of that, because that was the start of community engagement

[00:30:32] and author events really cementing.

[00:30:36] Yeah and from what I could gather you

[00:30:42] and your shareholders maybe driven a lot by you

[00:30:47] that was about also an industry view of your business.

[00:30:53] You could see how, you know, you were in the business

[00:30:56] because it was important to have, give Australian writers a voice

[00:31:01] and share innovative ideas.

[00:31:04] So you can sell books but then you can,

[00:31:07] and this is what I marvel at.

[00:31:11] I don't want to miss talking about when borders came into town

[00:31:15] and smack opposite where you are in Carlton

[00:31:19] but where your business is such a part of that industry community

[00:31:25] as well as the local community and having these events

[00:31:29] you could, yes it's going to make more people aware of

[00:31:35] the things the bookstore, bookshop but it's also,

[00:31:38] it engages people and it gives life to the shop

[00:31:45] because it's after hours or in that case it was around the corner

[00:31:48] but there's a lot of activity, notice boards,

[00:31:52] it is a real sort of a meeting place.

[00:31:56] Yeah I mean that's what I loved all our shops

[00:32:00] and I like bookshops a lot

[00:32:02] because they are safe places for people to meet and together

[00:32:06] and I love going to, I certainly love going into

[00:32:12] or working at my Ligon street shop

[00:32:14] because so many people come in, they're old friends

[00:32:16] and it's chat, a lot of chatting which

[00:32:21] in between stacking shelves.

[00:32:24] Did you get ticked off by anyone at pre-Christmas last year

[00:32:28] because you were chatting too much?

[00:32:31] It was hectic.

[00:32:33] It was, I mean that's a great Christmas in retail

[00:32:36] is a lot of fun.

[00:32:38] Yeah, yeah, a great deal of fun.

[00:32:42] It's another, as I said at the beginning

[00:32:44] another watching, catching up again with you

[00:32:48] briefly while you were as an example

[00:32:51] someone who's totally into their business.

[00:32:54] I mean probably that's one of my weaknesses as well

[00:32:57] is that I have to do everything

[00:33:00] and I wasn't a terribly good delegator

[00:33:07] and now it's too big, I can't, it became so big

[00:33:13] that I had to trust people.

[00:33:15] Yeah, yeah, yeah.

[00:33:17] And I'm sure I frustrated a lot of my staff.

[00:33:20] So if we roll forward to, you remain the chair

[00:33:27] but what did you step down as the CEO

[00:33:32] or in middle of last year, middle of 2023?

[00:33:36] Middle of last year, I've been transitioning

[00:33:38] probably for about two or three years.

[00:33:40] And did that involve building up a team below you

[00:33:46] as a succession plan so that you could go with less impact

[00:33:51] on the business if you'd built some management capability?

[00:33:57] Well I'd started to bring in more,

[00:34:01] or give people more responsibility.

[00:34:03] That was quite a while ago.

[00:34:06] Greg left the business in probably,

[00:34:11] I can't remember, maybe 2005, 2006.

[00:34:17] And I became the CEO then and I sort of started to,

[00:34:24] I did get some advice from people

[00:34:27] and one of them was you need to build up a team

[00:34:32] and you have to need professional marketing people

[00:34:35] and professional.

[00:34:37] I've been doing that and I was conscious

[00:34:41] what am I going to do?

[00:34:43] I'm 75, going on 76 now.

[00:34:47] This is 10 years ago, what am I going to do?

[00:34:53] And my son had been working in the business,

[00:34:58] sort of holiday jobs and things like that.

[00:35:02] And then he came back and started to say

[00:35:06] he actually wanted to work full-time.

[00:35:09] And he'd been working,

[00:35:11] we opened a little annex in the State Library which he ran,

[00:35:15] which was horrible little thing, he did it.

[00:35:18] It's now a really nice little shop that's doing really well.

[00:35:23] And then we opened a shop in Doncaster

[00:35:27] and he said I'll go and manage that.

[00:35:32] So he opened the...

[00:35:33] Say land from...

[00:35:35] He worked in the business.

[00:35:37] I still wasn't sure what his plans were.

[00:35:40] We sort of had a close relationship

[00:35:43] but we didn't talk about that.

[00:35:45] He used to get cross with me.

[00:35:47] How so?

[00:35:49] Like what are you going to...

[00:35:51] Yeah, if I said what are you going to do

[00:35:53] or anything like that.

[00:35:55] And I did have...

[00:35:57] This chap who sort of gave us

[00:35:59] a bit of corporate governance advice

[00:36:01] and financial advice and I was talking to him.

[00:36:03] I just don't know what Joe wants.

[00:36:05] He said I'll go and have a talk to him.

[00:36:08] So he went and had a talk to Joe, my son.

[00:36:11] And Joe really loves the business

[00:36:14] and he thinks really strategically about it.

[00:36:17] So it's sort of revelation to me.

[00:36:21] The advantage of having someone in the middle...

[00:36:25] Yeah, that helps.

[00:36:27] ...converting the conversation or the communication.

[00:36:29] Yeah, without the baggage.

[00:36:31] Yeah.

[00:36:33] So did that then give you a fill-up

[00:36:37] in terms of maybe there is someone who...

[00:36:40] Yeah.

[00:36:42] ...is a successor?

[00:36:44] Did you get that and had you already had in mind

[00:36:48] what an ideal successor would look like?

[00:36:54] No, I knew I sort of wanted the flavour

[00:36:57] of the business to continue.

[00:36:59] But I also wanted it to thrive.

[00:37:02] And I knew that I was getting to the stage

[00:37:05] where I would say, oh, we did this in 1985.

[00:37:08] It was a really good idea.

[00:37:10] Let's do it again.

[00:37:12] Yeah.

[00:37:14] Maybe one time...

[00:37:16] You got a couple of signals at one time

[00:37:19] and 20 was still a good idea.

[00:37:21] So I knew that we needed fresh.

[00:37:25] Yeah.

[00:37:27] That's challenging to take in and process.

[00:37:33] Yeah.

[00:37:38] It is.

[00:37:40] So that was when Gerald had that conversation with Joe,

[00:37:44] which Joe was probably three or four years ago.

[00:37:47] So after that we consciously...

[00:37:51] I gave him more and more responsibility.

[00:37:53] And so probably in the last two years,

[00:37:57] he's been running it operationally.

[00:37:59] Yeah, okay.

[00:38:01] And I've sort of been fapping around more.

[00:38:04] I mean, we had COVID then,

[00:38:06] and that was obviously terrible for us and everyone.

[00:38:09] Yeah.

[00:38:11] But do you have a formal role in the business?

[00:38:16] No, not at this stage.

[00:38:17] It's a work in progress.

[00:38:19] Is that something you...

[00:38:21] Like how...

[00:38:23] One of the...

[00:38:25] How you adapt from and deal with starting...

[00:38:29] Taking over readings back then.

[00:38:31] Yeah.

[00:38:33] Growing it, getting involved,

[00:38:35] doing all of what you did, achieving what you achieved,

[00:38:37] and then saying it's time for someone else.

[00:38:41] You know, it's a massive transition

[00:38:44] at a personal level I can only imagine.

[00:38:47] Is that...?

[00:38:48] Yeah, look, I still feel a bit uncomfortable.

[00:38:50] And I guess I went back and worked behind the counter at Christmas

[00:38:54] and I did enjoy that.

[00:38:56] Yeah.

[00:38:58] It's probably... I would like to do a bit of that.

[00:39:02] Still, maybe.

[00:39:04] Yeah.

[00:39:05] I'm doing a bit of buying.

[00:39:08] Yeah, okay.

[00:39:09] I quite like doing a bit of some deals.

[00:39:11] Yeah.

[00:39:13] Don't like...

[00:39:15] And I'd like to sort of...

[00:39:16] We'll fix up, make sure that we've got

[00:39:18] the right governments and management structure.

[00:39:21] Yeah.

[00:39:22] Joe feels supported.

[00:39:24] Um...

[00:39:26] One of my regards, I had a terrible work-life balance.

[00:39:30] And...

[00:39:32] I know it's something that Joe, as my son, you know,

[00:39:36] his father was never...

[00:39:38] Yeah, you were totally consumed?

[00:39:40] Totally consumed.

[00:39:41] Yeah.

[00:39:42] It was...

[00:39:44] I'd go to work at seven, come home at...

[00:39:47] Seven then go and work in Walfast.

[00:39:49] Yeah, yeah.

[00:39:51] Um...

[00:39:52] Yeah.

[00:39:53] And every weekend and...

[00:39:55] Well, it was a seven-day a week business, wasn't it?

[00:39:59] Mm-mm.

[00:40:00] And it probably would have...

[00:40:01] Obviously I had people working there,

[00:40:04] but we had the other shops and...

[00:40:06] Yeah, but you were totally absorbed.

[00:40:08] Yeah.

[00:40:09] And that's...

[00:40:11] That's not a good way to be...

[00:40:14] Yeah.

[00:40:15] I don't...

[00:40:16] So if you were looking back,

[00:40:20] I mean, you said you also invested in technology

[00:40:23] and you invested in a website,

[00:40:25] but you did struggle with letting go or handing off.

[00:40:30] Is that one thing you might think about doing differently

[00:40:34] if you were to go back?

[00:40:37] Um...

[00:40:39] Was it...

[00:40:40] Because, you know, it's also like to build this institution.

[00:40:44] I...

[00:40:45] You know,

[00:40:46] readings leave such a mark on our cultural well-being in the city

[00:40:53] because of readings.

[00:40:55] And there are other businesses we were chatting before we got in

[00:40:58] about these businesses that are there

[00:41:01] and have been there for a long time,

[00:41:02] but, um...

[00:41:04] Yeah, it's...

[00:41:06] It kind of...

[00:41:07] You know, so sometimes, you know,

[00:41:10] founders rightfully wrongly put everything they've got into it

[00:41:16] and other people get to benefit from it,

[00:41:18] but not, you know...

[00:41:20] And the founder may well feel like that's their purpose

[00:41:23] and their mission,

[00:41:24] but, you know, it doesn't leave a lot of time

[00:41:27] for anything else when you're so focused.

[00:41:31] No, it doesn't.

[00:41:33] Um...

[00:41:34] And I've...

[00:41:37] You know, a lot of people I know in my industry

[00:41:40] have got similar issues.

[00:41:42] I've got a very, very close friend in, um...

[00:41:45] He has a bookshop in Sydney,

[00:41:47] David Gawant from Glee Books.

[00:41:50] And he's had the same sort of drive.

[00:41:52] He's a very similar business to readings.

[00:41:54] You know, he's...

[00:41:56] He wants his business to make a difference to the community.

[00:42:00] Um...

[00:42:01] So he does the kinds of engagements that...

[00:42:04] Yeah.

[00:42:06] And sadly for him, he doesn't have a son who's interested and...

[00:42:10] Or a daughter or...

[00:42:12] Or anyone.

[00:42:13] So he's sort of a bit of a crossroads.

[00:42:15] Yeah.

[00:42:17] Yeah.

[00:42:18] And therefore, like, the, um...

[00:42:23] The necessity and perhaps the only choices to keep going,

[00:42:28] isn't it?

[00:42:29] Yeah, it's a bit sad.

[00:42:31] Yeah.

[00:42:32] I mean, one of the...

[00:42:33] And sort of one of the problems with the book industry

[00:42:35] is that it had so much bad press through Amazon

[00:42:40] and e-books that everyone outside the industry

[00:42:43] is often surprised that we're still going.

[00:42:46] Yeah.

[00:42:47] Yeah.

[00:42:48] Um, I think I was listening to one of your earlier podcasts

[00:42:50] and I think you made the comment, Michael,

[00:42:52] that if you're earning above a certain level profit

[00:42:57] you should expect to get two or three knocks a year on your door.

[00:43:01] Yeah.

[00:43:02] And I was like, well, readings does that.

[00:43:04] I haven't had anyone knock on my door.

[00:43:07] All right, well...

[00:43:10] Well, maybe your time is near, but it'd have to be...

[00:43:16] So that's a...

[00:43:18] If you had to...

[00:43:20] For whatever reason there was an opportunity to,

[00:43:25] you know, this is just playing things out.

[00:43:27] About selling the business.

[00:43:30] Is there things that you would have to demand of a buyer

[00:43:34] that would be, you know, vitally important to...

[00:43:38] This is just speculating.

[00:43:40] Yeah.

[00:43:41] But it's often, you know, when the business is so essential

[00:43:45] in, you know, the founders' lives

[00:43:47] and, you know, occupy a large part of their existence

[00:43:50] and it's important culturally

[00:43:53] and the owners recognize that.

[00:43:56] And I deal with owners of businesses in small regional towns

[00:44:01] and they're modest businesses, but they're vitally important

[00:44:06] and they do care about the business continues

[00:44:09] and they do care about who actually buys it.

[00:44:11] So we've had time.

[00:44:13] No, we don't want your money

[00:44:15] because the owner thinks they wouldn't do what should be done.

[00:44:20] Yeah, look, I mean, that's a hard...

[00:44:24] I don't know what...

[00:44:26] It's without notice, as I say on the...

[00:44:28] Yes. I don't know what...

[00:44:30] Well, obviously at the moment Joe is very engaged

[00:44:33] and loves it and has got plans for it.

[00:44:37] At some stage he's going to come to an end too.

[00:44:41] I mean, how do you guarantee things from the grave?

[00:44:45] It's...

[00:44:47] That's a really difficult question.

[00:44:50] I love readings to...

[00:44:54] Well, I hope readings has been a sort of community-focused business.

[00:44:58] Yeah.

[00:45:02] I mean, I started this foundation in 2009

[00:45:08] where, you know, we were starting to make quite reasonable profits

[00:45:14] I thought, I don't need that money.

[00:45:20] We need to keep money back to reinvest.

[00:45:25] Yeah. Yeah.

[00:45:26] But personally...

[00:45:28] You're okay.

[00:45:30] I'm okay.

[00:45:31] Yeah.

[00:45:32] So we decided that we'd...

[00:45:36] give 10% of our profits back to staff

[00:45:41] and also 10% of our profits to...

[00:45:43] We started up this charitable foundation.

[00:45:45] What's that called?

[00:45:46] It's called the Readings Foundation.

[00:45:48] And I love it.

[00:45:52] I think the staff really love it.

[00:45:54] We've given away about $2 million since we started it up.

[00:46:02] Excellent.

[00:46:04] We've put almost a million dollars in the bank

[00:46:07] so it can keep on going.

[00:46:10] Yeah. Self-sustaining, huh?

[00:46:12] I hope that's the plan.

[00:46:14] I would like, you know, if we did sell the business

[00:46:17] that someone might continue those kinds of...

[00:46:19] Yeah. Yeah.

[00:46:20] Those kinds of values.

[00:46:23] It's also hard with a big business too

[00:46:26] to know how do you keep those small business passions alive.

[00:46:33] Well, yeah, there's many, many examples

[00:46:36] of big businesses buying medium or small businesses

[00:46:39] and there's a fairly heavy focus on one plus one equals three

[00:46:46] but completely misses culture

[00:46:50] or just other more nuanced things about the way

[00:46:54] they both operate

[00:46:56] and whether they're actually potentially aligned or not.

[00:47:00] Well, I've seen certainly in the publishing industry

[00:47:04] where there's quite a lot of...

[00:47:07] there's a lot of big organizations and buyouts

[00:47:10] and things like that

[00:47:11] and you see they're very traumatic for all the people involved

[00:47:16] and does change the culture of the businesses.

[00:47:21] Yeah.

[00:47:22] Look, it is a major event in any...

[00:47:27] if you're a business owner

[00:47:28] and for one reason or another

[00:47:30] you choose to sell or you get approached

[00:47:33] or you have to sell.

[00:47:34] And if you've cared about your business

[00:47:36] it's a really difficult transition process.

[00:47:42] Business buyers can often be a big part of the problem as well.

[00:47:50] Business owners aren't prepared, haven't thought about it.

[00:47:54] So and then you throw in some advisors around that

[00:47:58] who are advising owners or sellers and buyers

[00:48:03] and it's just so complex and emotional

[00:48:08] and it is a trauma.

[00:48:11] That's why I think a lot of owners fail to do anything about it

[00:48:14] because it can look pretty daunting, pretty overwhelming.

[00:48:18] Well, I remember when I first started the record shop

[00:48:24] and then bought readings since the early late 70s

[00:48:28] my sister was working and living in an Arbor, Michigan

[00:48:34] and I used to go on a buying trip

[00:48:37] and I'd go make a side trip to sea

[00:48:39] and in an Arbor, Michigan

[00:48:41] was this wonderful independent book shop called Borders.

[00:48:46] Owned by the Borders brothers

[00:48:49] and I just thought, oh that is...

[00:48:51] I would love to have a book shop.

[00:48:53] No, it was probably about the same size readings as now.

[00:48:57] We were in a tiny shop and it was just terrific

[00:49:01] and then the Borders brothers got ambitious.

[00:49:05] They opened a few shops

[00:49:07] and they ran out of money

[00:49:09] and they got into bed with Kmart

[00:49:11] who opened more and more shops

[00:49:14] and then the internet hit

[00:49:16] and they don't exist anymore.

[00:49:20] Well, they opened up in Carlton in 2008.

[00:49:26] They smack bang opposite you

[00:49:28] which is a big statement in and of itself

[00:49:34] and then so how did you feel

[00:49:37] and what took place the next year or two?

[00:49:41] I thought it was very apprehensive

[00:49:43] because as I said before, I'd been to America quite a lot

[00:49:46] and seen a lot of really great book shops

[00:49:51] closed when the Borders opened up across the road from them

[00:49:54] and you know, there's famously that film,

[00:49:56] you've got mail and...

[00:49:58] Yeah.

[00:50:00] So I was very apprehensive

[00:50:05] but as I say, I'd anticipated probably what happened

[00:50:08] so we were so fortunate we had the larger shop

[00:50:12] that was a lot smaller than the space borders took

[00:50:14] but it was still enough to...

[00:50:17] And you'd invested in, you know,

[00:50:20] you're getting your stock right,

[00:50:21] you'd conservatively managed so you probably...

[00:50:24] I'm guessing you probably had, you know, cash reserves

[00:50:28] or you know, you had your team geared up.

[00:50:31] Yeah, and we'd started to be more professional

[00:50:34] about our marketing so we had that kind of stuff

[00:50:37] and I got some quite good press

[00:50:42] and I mean one of the things Borders was an American company

[00:50:46] in first of the jam factory in South Yarra

[00:50:51] and then I think Carlton was the second

[00:50:53] but they were run by Americans

[00:50:55] and the buying was done by Americans

[00:50:57] so they really didn't have any...

[00:51:01] Yeah, local.

[00:51:02] Local knowledge.

[00:51:03] Yeah, and it was private equity backed.

[00:51:05] Yeah, I think.

[00:51:06] It did later become...

[00:51:08] Oh, it did later, okay.

[00:51:09] So they didn't have

[00:51:13] that sort of passion that we had

[00:51:17] and they didn't have the connection

[00:51:18] with the writing community.

[00:51:21] Yeah, yeah.

[00:51:22] And so...

[00:51:23] They had a cafe out in the back which they...

[00:51:25] It wasn't very good.

[00:51:27] Those Gloria Jeans in the end or something.

[00:51:31] So that was...

[00:51:35] So I mean we took a bit of a hit initially

[00:51:37] and then we started to grow again,

[00:51:40] not huge but it was just people took it on,

[00:51:44] our customers took it on as their battle.

[00:51:48] So why that?

[00:51:51] Why did they do that?

[00:51:53] What do you think?

[00:51:54] Somehow we'd connected with them

[00:51:58] that they felt readings was there.

[00:52:01] So they weren't just Instagram followers.

[00:52:05] I'm being a bit cynical

[00:52:08] but there's people who maybe were local

[00:52:12] or maybe I think you have a lot of people

[00:52:14] that it's a bit of a ritual to come to the store from wherever

[00:52:18] and have a coffee down the Tiyamos or whatever.

[00:52:21] Yeah, and go to the cinema.

[00:52:23] Yep.

[00:52:24] And then it became...

[00:52:25] Yeah, so they fought for it.

[00:52:27] It was important to them.

[00:52:28] It was part of that their safe place,

[00:52:31] this place where they felt comfortable

[00:52:33] that they could go into readings,

[00:52:35] they could say to their friends,

[00:52:37] I'll meet you in readings.

[00:52:39] They knew that if they might know a staff member

[00:52:43] or see a mate and so they became our greatest...

[00:52:48] I remember a friend of a customer who worked

[00:52:51] in advertising came into me one day

[00:52:53] with a crumpled bit of paper and he unfilled it

[00:52:55] and said, leave us on frontier, books without borders.

[00:52:59] I said, wow!

[00:53:00] And I immediately had a banner made up

[00:53:03] and I put it up in front of the shop

[00:53:06] and people loved it.

[00:53:08] And...

[00:53:10] Oh, that was so good.

[00:53:12] And we had this...

[00:53:13] It was the time of Harry Potter when those books were huge

[00:53:17] and they controlled the release date and credibility.

[00:53:20] Everything was embargoed

[00:53:22] and you can only sell it at a certain time

[00:53:24] and borders would discount it really heavily

[00:53:29] and we had something like a thousand kids

[00:53:33] and the local high school jazz band

[00:53:37] and a barbecue

[00:53:39] and someone had lent me their Morris Minor

[00:53:42] for us to deliver the books in

[00:53:44] and Borders had a guy with a falcon on him

[00:53:48] and no one in the shop.

[00:53:52] Victory!

[00:53:54] And then I think, you know...

[00:53:57] I don't like saying this but Carlton did become...

[00:54:00] If you wanted to get a book, Carlton was the place to go.

[00:54:03] You go, hopefully, go first to readings

[00:54:06] and if they didn't have it, you go across the road to borders.

[00:54:09] Yeah, so it wasn't...

[00:54:11] Yeah, that golden mile of cars analogy

[00:54:15] which I bring out a bit too often

[00:54:19] but you go to buy a car

[00:54:21] so you go down onto Brighton Road or whatever it was

[00:54:24] down south and there were 17 dealerships

[00:54:27] but there was a car there that was going to...

[00:54:30] Sooch.

[00:54:32] Yeah, so it's sort of...

[00:54:34] And then when they closed

[00:54:37] obviously we got a huge Phillip big spike

[00:54:41] but then it started to drop away again

[00:54:45] that people didn't...

[00:54:48] that had brought people to the area.

[00:54:51] Right, yeah.

[00:54:53] That's interesting.

[00:54:55] Where are things at now?

[00:54:57] What's the plans for the business?

[00:55:00] Well, I think sort of strategic growth.

[00:55:03] I don't want to open up against another shop.

[00:55:08] So a lot of the places are taken.

[00:55:13] Yeah.

[00:55:15] We did open a shop in the city just after COVID

[00:55:20] and there are other bookshops in the city

[00:55:22] but there used to be 15 bookshops in the city

[00:55:25] and when we opened our shop in Emporium

[00:55:28] there was only three bookshops

[00:55:31] so I thought, you know,

[00:55:33] Metropolis the size of Melbourne should have more than three bookshops.

[00:55:37] Yeah.

[00:55:40] And that's been successful

[00:55:43] and we're opening a shop in Chadston.

[00:55:47] Okay, and so these are...

[00:55:50] So, in Emporium, is it...

[00:55:53] would it encompass going to other states?

[00:55:58] Well, it's a question of how can you...

[00:56:01] yeah, how can we maintain that sort of community feel

[00:56:08] and add something of value back to the community?

[00:56:14] Glee Books do a great job

[00:56:18] because they know their local market.

[00:56:20] I don't know the business particularly well

[00:56:22] but I'm sure that same goes for Hobart,

[00:56:25] there'd be...

[00:56:27] and other places there'll be some, you know,

[00:56:30] bookshop possibly a music shop

[00:56:34] and there are things that have been around

[00:56:36] and they survive because they know their market.

[00:56:40] And one of the challenges facing our industry

[00:56:42] is that a lot of shops have closed.

[00:56:46] The most obvious ones were when borders closed.

[00:56:49] There was...they all closed

[00:56:52] but they'd...by the time they were in their last years,

[00:56:55] they'd been bought by a venture capital company

[00:56:57] that owned Angus and Robinson bookshops.

[00:57:00] So when borders closed,

[00:57:02] all the Angus and Robinson bookshops closed.

[00:57:05] So the industry lost a lot of retailers

[00:57:08] and they've never really been replaced.

[00:57:12] Yeah.

[00:57:14] And some of the sales have been replaced by online.

[00:57:20] So I do think that...

[00:57:22] I'd say to my team, you know,

[00:57:24] I think we have an obligation to look at opening more shops

[00:57:27] because the authors and the industry needs more shops.

[00:57:32] Yeah.

[00:57:33] It's really difficult for authors.

[00:57:35] Australia is becoming more and more difficult

[00:57:37] for Australian authors at the moment

[00:57:40] because a lot of the sales that used to go through borders

[00:57:46] now going through online, through Amazon and Booktopia

[00:57:49] in the way people shop online is different.

[00:57:52] I'm a strong believer that...

[00:57:55] I see it all the time that people come into a bookshop.

[00:57:59] Often they come in because...

[00:58:01] as I say, because it's a nice-based way to meet people

[00:58:05] and they discover something.

[00:58:07] Yeah.

[00:58:08] They discover something because the bookseller...

[00:58:11] they chat to a bookseller who says,

[00:58:13] oh, I've just read this. It's fantastic.

[00:58:15] Or the way, you know, I'm very conscious of the way

[00:58:18] you display things.

[00:58:19] So we try and...

[00:58:21] the books we believe in, we try to make really prominent.

[00:58:23] And so I was like, oh, I haven't noted that book.

[00:58:25] I'll pick it up.

[00:58:26] Yeah.

[00:58:27] And you don't get...

[00:58:28] That's not...

[00:58:29] People go online pretty much.

[00:58:31] They've heard about a book.

[00:58:32] They go to online to buy it.

[00:58:34] At the cheapest price they can.

[00:58:36] Yeah.

[00:58:37] So that ability for a new author...

[00:58:42] to be discovered is not there.

[00:58:44] And that sort of really raised me.

[00:58:46] I've got a very dear friend who's got an inventor publisher

[00:58:50] and company, and you know, he used to sell...

[00:58:54] I used to sell 3,000...

[00:58:56] I could place 3,000 copies into shops of a new author.

[00:59:02] Now I struggle to get 1,000 placed.

[00:59:06] Yeah.

[00:59:07] And half of them are sent back to me.

[00:59:09] Yeah, yeah.

[00:59:10] So it's very tough...

[00:59:12] Yeah, curiosities on the wane perhaps.

[00:59:16] You know, it's too easy online.

[00:59:18] You get your subject to an algorithm

[00:59:21] that's a few clicks all the way to a...

[00:59:24] But you know, some people like that experience.

[00:59:26] I think out of that...

[00:59:28] Well, I think everyone...

[00:59:29] people do use it.

[00:59:30] I mean, we did a survey and...

[00:59:33] not for a while ago, of customers.

[00:59:36] And I guess what shocked me was that our customers

[00:59:40] weren't faithful.

[00:59:44] They used a contemporary term, they were polyamorous.

[00:59:47] Yeah.

[00:59:49] That they would shop around.

[00:59:52] Yeah.

[00:59:53] Well, you know...

[00:59:54] But I don't think it was any malicious...

[00:59:56] It was like, you know,

[00:59:57] oh, I've heard about this book.

[00:59:59] I'll go online and get it.

[01:00:01] But I love readings.

[01:00:03] When I go to Ligand Street to the Nova

[01:00:05] or something like that,

[01:00:06] or to the Lido in Hawthorne,

[01:00:09] I'll go into readings.

[01:00:11] Yeah.

[01:00:12] It's not that same rusted on.

[01:00:15] Yeah, yeah.

[01:00:16] Yeah, interesting.

[01:00:18] I'm sure you find that...

[01:00:20] Yeah, like it's really hard.

[01:00:21] ...I do it myself, you know.

[01:00:23] I still like...

[01:00:25] I do, you know, deal your love...

[01:00:27] you know, rituals, you know.

[01:00:29] Yeah.

[01:00:30] You know, but it gets harder and things change.

[01:00:33] But one of the things that out of that

[01:00:35] is that there are a lot of smaller,

[01:00:38] independent book shops around the place

[01:00:41] and they do occupy, you know,

[01:00:44] the lawn books down there.

[01:00:48] And lots of other, you know,

[01:00:51] out of Melbourne.

[01:00:53] And it's really...

[01:00:54] You really hoped that there is a succession

[01:00:58] or a transfer of ownership with all of these

[01:01:01] because it's pretty easy to see

[01:01:04] a lot more of those spaces being taken over by...

[01:01:09] Could be, you know, development of the building.

[01:01:12] You know, it's all...

[01:01:13] Yes.

[01:01:14] So, you know, maybe that's...

[01:01:16] Yeah, I'm conscious, yeah, with readings

[01:01:18] you don't want to go in and face off directly

[01:01:22] because there's probably not enough in the market for you.

[01:01:25] But, you know, picking up those or seeing those

[01:01:28] transition to someone that they think is a good home

[01:01:31] might be a part of the answer.

[01:01:33] Well, it's interesting.

[01:01:34] I don't know if you read that there's this shop

[01:01:37] called Hill of Content Bookshop,

[01:01:39] which has been around since the 20s in the same location

[01:01:43] and the property owners are selling the building.

[01:01:48] The lease is finished so it's Hill of Content

[01:01:52] with the tenants, they don't have any security.

[01:01:55] And it's unlike...

[01:01:56] No, I don't know how like...

[01:01:58] But a buyer is going to try and get the most yield.

[01:02:03] They can.

[01:02:04] Yeah.

[01:02:05] And that a bookshop may not be able to afford to pay that.

[01:02:09] Yeah, it's a reality,

[01:02:11] but you'd like to think there's another way

[01:02:13] to migrate that brand and that community

[01:02:18] down the road or around the corner or something.

[01:02:20] It is interesting that those sort of local...

[01:02:26] You were talking before about those local businesses

[01:02:29] that are sort of not necessarily bookshops or anything,

[01:02:32] but they can anchor a community

[01:02:35] and be something that's terribly vital

[01:02:37] and people don't realise it.

[01:02:38] And once it's lost,

[01:02:39] there's something that's gone out of the community.

[01:02:41] Yeah.

[01:02:42] And it's another nail in the coffin

[01:02:44] and one less reason to go to regional town,

[01:02:49] please.

[01:02:50] One less reason to go there

[01:02:52] because now I need to go somewhere bigger

[01:02:54] because I can't get whatever I can't get

[01:02:58] and then the traders that are left suffer.

[01:03:01] I mean, we've seen it.

[01:03:02] We said before we took over the Cosmos Bookshop in St Kilda

[01:03:07] which was an incredibly vibrant business.

[01:03:09] St Kilda at the time was incredibly vibrant retail strip,

[01:03:13] very much arts oriented, a lot of music and writers around there.

[01:03:18] And it became a very successful retail strip

[01:03:21] and rents had gone up exponentially

[01:03:24] and all the old businesses,

[01:03:27] the owners were retiring

[01:03:29] or couldn't afford the new rents

[01:03:31] so they were closing down.

[01:03:33] And suddenly what had made St Kilda

[01:03:36] an interesting vibrant retail strip was gone.

[01:03:39] Yeah.

[01:03:40] And so now half the shop's vacant,

[01:03:44] every business is struggling.

[01:03:47] And the people from St Kilda lament,

[01:03:52] we've lost Ackland Street.

[01:03:55] There's no reason to go there anymore

[01:03:58] and there's just tacky vape shops

[01:04:00] and nail shops and horrible bars.

[01:04:04] I always thought it'd be interesting,

[01:04:06] Leo's spaghetti bar up on Fitzroy Street.

[01:04:10] I kind of had this,

[01:04:13] it's been there since the 50s.

[01:04:16] And I think it's that one.

[01:04:18] And they've got Leo's built into the brickwork.

[01:04:23] I wondered if they own their own real estate.

[01:04:26] Yeah, I don't know.

[01:04:27] You see businesses around that have established

[01:04:31] 50, 60, 70 years ago

[01:04:33] and you think as you did of buying a real estate

[01:04:37] for some businesses,

[01:04:40] it gives you the opportunity to lock it in for a long time.

[01:04:43] Business has got to pay its way.

[01:04:46] Yes, yes.

[01:04:47] But it's...

[01:04:48] It's interesting.

[01:04:49] I've been sort of in my retirement,

[01:04:52] I've become interested in our policy

[01:04:58] and what we're talking about,

[01:05:00] you've got these sort of cultural businesses

[01:05:03] that should they,

[01:05:07] should governments or the community

[01:05:09] give them support to make them?

[01:05:12] It's a very interesting question.

[01:05:15] I've been reading up in France, for example,

[01:05:18] they are passionate about book shops

[01:05:20] so the government gives them huge amount of support.

[01:05:24] They have fixed price

[01:05:26] so you can't discount books

[01:05:29] so every book has got to be sold

[01:05:31] at the same price for a certain period.

[01:05:34] They've just bought in this rule

[01:05:38] that online retailers have to charge

[01:05:42] a proper postage rate.

[01:05:45] Yeah.

[01:05:46] It's before Amazon was selling a book

[01:05:49] because they couldn't discount it

[01:05:51] so they say, I'll ship it to you for no freight.

[01:05:54] Yeah.

[01:05:55] And then they bought in a law saying,

[01:05:57] no, you've got to charge freight

[01:05:59] and so then Amazon said, I'm going to charge you one cent.

[01:06:01] Yeah.

[01:06:02] And then they bought in a rule

[01:06:04] they have to charge three euros.

[01:06:06] Yeah.

[01:06:07] And Germany also has great support

[01:06:09] and so they have a very vibrant...

[01:06:11] Yeah, that's it.

[01:06:13] And I mean the free market years would say,

[01:06:16] well, you know, competition is good.

[01:06:20] It doesn't matter where people buy their book from

[01:06:22] as long as they can get it at the cheapest price

[01:06:24] and I sort of wonder...

[01:06:27] I wonder if...

[01:06:29] Yeah, it's like...

[01:06:34] You know, my dad was an accountant

[01:06:37] and I used to laugh at him about, you know,

[01:06:40] accountants know the cost of everything

[01:06:43] and the value of nothing.

[01:06:45] But that's very unfair

[01:06:47] but that idea that there's a broader framework

[01:06:53] for evaluating the value of something.

[01:06:55] It's not just the numbers.

[01:06:57] It's about impact.

[01:06:59] This is why social enterprise is burgeoning

[01:07:03] and there's going to be a lot of things that fall over there

[01:07:06] but they're addressing problems

[01:07:09] and creating impact

[01:07:11] and yes, they have to be financially viable

[01:07:14] but, you know, is it X or Y?

[01:07:18] And if the owner wants Y

[01:07:20] and that's the high, that's fine.

[01:07:22] But somehow we've got to foster

[01:07:25] some incentives

[01:07:29] or just at least create a bit of hope

[01:07:32] that you can do things beyond just for the max amount of money.

[01:07:37] Yeah, I mean, you don't want to proper badly run businesses

[01:07:41] but people who've got...

[01:07:43] are contributing something.

[01:07:45] Yeah, and that's where it maybe is at a higher level

[01:07:48] where you say we want a vibrant regional Australia

[01:07:52] so we need to have certain level...

[01:07:57] I think about this all the time.

[01:07:59] What is the viable commercial infrastructure

[01:08:01] of a town of 5,000 people?

[01:08:04] You need diesel fuel, you need milk and bread

[01:08:07] and you need a pub and maybe it's a bookshop

[01:08:10] or a cafe or a barber, all these things that are...

[01:08:14] and they're all quite modest businesses

[01:08:17] but don't overlook the value beyond

[01:08:21] how they interlink with each other

[01:08:24] but also can be, you know, if you're...

[01:08:27] if you don't aspire to be a billionaire or, you know, whatever

[01:08:32] they can be viable businesses

[01:08:35] and earn a good living and be part of a community.

[01:08:38] And one of the things I've published

[01:08:40] a friend who operates in England,

[01:08:42] Amazon we've taken up pretty well half the business

[01:08:46] most... a lot of small bookshops have got our business

[01:08:50] but Amazon, the book industry works off of it

[01:08:53] there's a recommended retail price

[01:08:55] and you get a discount offered

[01:08:58] but he was telling me that Amazon demand

[01:09:01] 65 to 70% discount

[01:09:04] so publishers obviously to accommodate that

[01:09:08] they put the price of books up

[01:09:10] so Amazon can then say we're selling at a half price

[01:09:13] and there's a study saying in Germany

[01:09:15] where you're not allowed to do that

[01:09:17] but actually the average price of books is actually less

[01:09:20] than they are in the UK where

[01:09:24] they have all this discount

[01:09:26] and it's like the supermarkets, you know

[01:09:30] there's so much manipulation

[01:09:33] well, there's market power

[01:09:35] and if you go back to when you went into readings

[01:09:43] and the vibrancy of that particular area

[01:09:48] at the time in the 70s

[01:09:51] with all what was going on

[01:09:53] it's like a really fertile new industry

[01:09:56] and it sounds like a bit like from what you're saying

[01:09:59] it's being a bit crushed again

[01:10:02] and that's not good

[01:10:04] Oh, it's interesting the governments announced last year

[01:10:09] a new creative Australia policy

[01:10:13] and obviously the minister was talking about writing

[01:10:18] and how important having Australian stories

[01:10:21] published and available and supporting writers

[01:10:24] and publishers

[01:10:26] and they didn't say anything about book shops

[01:10:29] which I, as I said before

[01:10:32] I think they're very important part

[01:10:35] of holding that cultural community up

[01:10:38] I've covered a lot of ground

[01:10:40] I did want to just get to bring this home

[01:10:46] I want to know what you're doing next

[01:10:49] but also your advice for those in the industry

[01:10:53] smaller book shop publishers

[01:10:55] what they should do to get themselves better prepared

[01:10:59] for an exit because everyone at some point

[01:11:03] has to exit or get a succession plan in place

[01:11:07] I think getting a succession, thinking about it is very important

[01:11:12] and obviously for many people

[01:11:14] they've put their heart and soul

[01:11:16] an amazing amount of sweat into building up their business

[01:11:22] and they deserve to get some reward for it

[01:11:25] so I guess it's thinking about it

[01:11:28] and getting advice on how to get that business ready to

[01:11:34] invest some time and money and energy

[01:11:38] to think about your options

[01:11:40] Everyone gets stale

[01:11:43] I mean I got stale

[01:11:45] I just was running out of ideas and enthusiasm

[01:11:49] and there's probably some young, excited person

[01:11:53] out there who will love your business

[01:11:57] and take it to another level

[01:12:00] and sometimes that's difficult because

[01:12:03] you're thinking they're better than I am

[01:12:07] but not necessarily

[01:12:09] I mean I bought the business from Ross

[01:12:15] and I think I've made it a much better business

[01:12:17] would Ross have made it a much better business maybe

[01:12:20] but if I was in Ross shoes or so

[01:12:24] I gave Mark and his partners the basis

[01:12:29] to build something wonderful

[01:12:31] and I truly believe that

[01:12:33] and I'm terribly grateful for Ross

[01:12:36] that he gave me that sort of solid ground

[01:12:39] and he was before the surgeon, Australian publishing

[01:12:45] but he gave me that solid ground

[01:12:47] that I could then seize that opportunity

[01:12:49] and take it and run

[01:12:51] Maybe, yeah I think that's a great way to think about it

[01:12:55] that there is another generation

[01:12:58] and we need another generation of business owners

[01:13:01] who need coaching and mentoring and advice

[01:13:04] but they've got energy and knowledge

[01:13:08] and experience in different ways

[01:13:11] so maybe there's mentoring for you

[01:13:16] is a pathway

[01:13:19] what's your week to week look like with...

[01:13:23] I'm struggling a bit to tell you the truth

[01:13:31] You started a podcast

[01:13:33] Yeah that was with another bookseller

[01:13:36] so I'm doing that

[01:13:38] But it's harder than you thought

[01:13:43] not to start a podcast

[01:13:48] No, it's about bookselling

[01:13:50] I suppose it's finding interesting people

[01:13:53] You've been so fully occupied for so many years

[01:13:59] and then they go to end the tap

[01:14:01] Yeah, I think that's part of it

[01:14:03] I've sort of been helping

[01:14:05] this really nice Indigenous arts organisation

[01:14:08] not far from where we're talking today

[01:14:10] They've been mainly working in the area of visual arts

[01:14:15] but they want to engage with the publishing industry

[01:14:18] so I've sort of been giving them a bit of help

[01:14:21] Excellent

[01:14:22] There's also this wonderful prize

[01:14:25] called the Hope Prize

[01:14:26] which we used to be involved in

[01:14:28] and it's a prize for writing about stories

[01:14:32] about hope, courage and resilience

[01:14:35] in a difficult world to give people inspiration and hope

[01:14:40] and that we're working with Beyond Blue

[01:14:43] which is an amazing organisation

[01:14:45] So I'm helping with that

[01:14:48] I'm judging a literary prize at the moment

[01:14:53] But you've got room for some other opportunities

[01:14:56] Yeah, I'd like to do other things

[01:15:01] What's the name of the podcast just before we...

[01:15:06] It's called the Booksellers Podcast

[01:15:08] It's not as professional as yours

[01:15:12] I like to do that

[01:15:14] That's interesting

[01:15:15] We're both learning

[01:15:17] I'm trying to get the Minister of Arts, Tony Birkhawn

[01:15:20] to tell us why he's not mentioning bookshops in his scheme

[01:15:24] but he hasn't responded to any of my emails

[01:15:27] Maybe you need to call him

[01:15:29] I don't know how

[01:15:30] Or maybe get on a plane

[01:15:35] Yeah, look at his...

[01:15:38] After getting out of a business

[01:15:41] it's a challenging time

[01:15:44] for most owners I've ever seen in that situation

[01:15:48] So you've got a lot of experience and value to add

[01:15:54] so I hope some of those things really flourish the podcast

[01:15:59] And I also...

[01:16:00] I mean, I don't want to be looking over the team's shoulder all the time

[01:16:07] Yeah

[01:16:08] Because it's not fair to them

[01:16:10] and also probably because I'll just come up and say

[01:16:12] well, 1985 we did it this way

[01:16:15] Did they pay for that shift in just before Christmas?

[01:16:18] No

[01:16:19] Yeah, I don't want to just be a wager

[01:16:21] for them to get their wages budget down

[01:16:25] All right

[01:16:26] Mark, that was a wonderful chat

[01:16:29] Thank you so much for taking time out

[01:16:32] I'm sure there's lots of interesting things going to come at you

[01:16:35] with all of what you...

[01:16:37] all that experience you've had

[01:16:39] If someone did want to reach out

[01:16:41] what's the best way?

[01:16:43] Are you happy?

[01:16:44] Happy for them to email me

[01:16:46] Yeah, we can put that in the show notes

[01:16:48] if someone's really...

[01:16:49] Yeah, it's pretty easy

[01:16:50] It's mark.rubo at readings.com.au

[01:16:53] Yeah, so there you go

[01:16:54] and you can search Mark up

[01:16:57] and he's visible

[01:17:00] All right, Mark

[01:17:02] Much appreciated the time

[01:17:03] It's been a pleasure

[01:17:04] and we wish you all podcast all the best

[01:17:08] Yeah, thank you

[01:17:19] Well I hope you enjoyed that episode of Small Business Banta

[01:17:22] and I hope it was helpful in you

[01:17:24] getting the most out of your small business ownership

[01:17:27] To subscribe or listen back

[01:17:29] or to check out any of the resources

[01:17:31] or information we talked about today

[01:17:33] head over to the website

[01:17:35] smallbusinessbanta.com.au

[01:17:37] Or if you want, search up Small Business Banta

[01:17:40] on your favourite podcast player

[01:17:42] Don't forget to subscribe

[01:17:44] and if it was really helpful

[01:17:46] I'd love it if you told another business owner

[01:17:48] about the podcast

[01:17:52] and how about you leave me a five star rating

[01:17:54] If you think I can help personally

[01:17:56] please reach out to me

[01:17:58] Michael Kerr via the website

[01:18:00] There's a new episode out every couple of weeks

[01:18:02] We'll catch up then