A day after US book store Borders collapsed, local chains Borders, Angus & Robertson and the Whitcoulls group of newsagencies in New Zealand have been placed into administration by owners REDgroup Retail.
It is understood the board had serious concerns about the solvency of the company and was forced to call in administrators Ferrier Hodgson this afternoon.
The ABC also understands that a combination of the high Australian dollar, cheap books online, high wages and rents, as well as the retail downturn led to the company's decline.
Last year REDgroup posted a full-year loss of $43 million.
The administrators say it will be business as usual while the business's financial status is assessed ahead of the first creditors meeting, which is expected to be held in March.
The REDgroup board is believed to be confident that the company can be restructured.
Between them the book retailers operate about 260 stores and are believed to employ around 2,500 staff in Australia, New Zealand and Singapore.
The first Angus & Robertson bookshop opened in Sydney in 1886, while Borders expanded into Australia from the US in 1998.
The Australian Publishers Association says it is saddened by the collapse of the retailers.
Maree McCaskill says it is a shame to see a reduction in the number of outlets offering a diverse range of books to Australian customers.
"This announcement, I guess, will sadden a lot of people," she said.
"But we're hoping that something positive comes out of it and that another entity may rise as a result of the administration and allow that diversified book store chain to continue."
Ms McCaskill says it is likely the book retailers have lost a huge share of the market to overseas-based online booksellers.
"Really what you're looking at is for all retailers - books and otherwise - an erosion of their markets because the Australian dollar is really high," she said.
"While the Australian dollar is high, a lot of Australian consumers determine that they will buy whatever they need online and from overseas suppliers."
She says allowing parallel imports on books would have had a far more damaging impact on the publishing industry than the collapse of Angus & Robertson and Borders.
"If you opened up the market then you would immediately see a depletion in the number of publishers and the offering from publishers into the market space," she said.
"You would have fewer opportunities for Australian authors to be able to write and be showcased - if you open the market up, they're the consequences."
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