Ten-year-old online Kiwi retailer Etailer, which runs the offtheback.co.nz daily deals website, has bought Books & Gifts Direct from London-listed Quarto Group for $800,000 plus a share of future profits.

The London-based book publisher exited its last non-publishing business with the sale of Books & Gifts, which had gross assets of $2.4 million as at December 31 and generated an expected trading loss for Quarto of $700,000 in the current financial year, it said in a statement to the London Stock Exchange on Friday.

Etailer BGD (2017), an entity set up to acquire the business, will pay $800,000 over the next two years for the business, and Quarto is entitled to half of debtor receipts for the next year and 15 percent of earnings before interest and tax for the next three years, it said.

Auckland-based Etailer was founded by James Hanafin and Robert Coleman in 2007, who each own about a quarter of the company, offering daily deals through the offtheback website in New Zealand and Australia.

The advent of online retailers such as Etailer, which claims to have sold goods at a 90 per cent discount to the recommended retail price, has seen the demise of a growing number of long-standing retailers running traditional ‘bricks and mortar’ stores.

Government figures show the value of non-store and commissioned based retail trade, which captures online retail, has soared 173 per cent over the past decade to $1.48 billion in the year ended March 31, compared to a 41 per cent increase in the value of core retail spending to $64.83b over the same period.

Quarto bought into New Zealand book wholesaler Premier Books in 2006 before taking full ownership in 2010, the year it rebranded it as Books & Gifts Direct and bundled it with Australia’s Lifetime Distributors. It sold the Australian arm of Books & Gifts Direct in March.