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HMV to centralise supply at Waterstone's

14.03.07

The Telegraph reports that HMV chief executive Simon Fox is to introduce a new supply chain, which will see publishers send their books to a centralised "consolidation centre" rather than directly to the shops. The move is part of a three-year turnround plan unveiled by Fox yesterday to anaylsts.

According to Fox, the revamped supply chain "will make a massive difference to how store staff spend their time", pointing out that staff at Waterstone's had to deal with 6m individual invoices each year. The centralised distribution system will cut the number to 100,000. This plan, along with closing about four loss-making HMV and "25 Waterstone's stores", should reduce the company's cost base by £40m a year by 2010.

The Telegraph also has it that the book chain is to push aside academic books in order to sell more stationery. According to the piece, Gerry Johnson, the managing director at Waterstone's, defended the strategy, but when asked if he was dumbing down the stores, he said "that does not dignify a response''. In the Guardian, Johnson, said there would be more emphasis on novels, cookery and children's books and less on "academic and humanities" areas, which he said could still be bought online.

Analysts have given a lukewarm reception to the new strategy, and the retailer's shares sank a further 24p, or 15.7 per cent, to 128.75p yesterday, following a profits warning. However, Philip Dorgan, analyst at Panmure Gordon, told the FT that there were some "good ideas in the review". But he added: "The suspicion is that it will be a case of rearranging the deck chairs on the Titanic."

Telegraph

waterstone's gerry johnson Simon Fox HMV

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