The Steimatzky bookshop chain has stopped payments to publishers of books it has sold, industry sources informed Globes on Tuesday.
Payments are several days overdue, exceeding the industry norm for payments between the chain and publishers, who are typically paid 60-100 days after books are sold.
Steimatzky, the largest bookstore chain in Israel, is owned by private equity fund Markstone Capital Partners Group LLC, which is struggling to pay the debts of another of its properties, Phenomenal Holdings (formerly Prisma Investment House). Following the collapse of the debt-ridden Prisma, Markstone recently entered talks with Phenomenal’s bondholders for a debt settlement.
Steimatzky said on Tuesday that the delay in payments was due to the sudden death of Steimatzky chairman and Markstone co-manager Amir Kess, who was killed in a road accident last Thursday.
Steimatzky told Globes, “In the shadow of the terrible tragedy that occurred, Steimatzky has been told that the Fund (Markstone) is in a situation of being reorganized, and is handling all matters as swiftly as possible.”
However, the overdue payment has generated concern that the book company is suffering from liquidity problems.
Last week, Steimatzky CEO Iris Barel disclosed to reporters that March had been “catastrophic with a drastic fall in sales.” She blamed the fall in sales on the new Book Law and generally difficult market conditions.