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13th October 2008

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Hub delay 'the right decision'

01.07.08 Graeme Neill

Retail analysts have welcomed Waterstone's decision to delay the full implementation of its new supply chain as the right commercial decision. Waterstone's m.d. Gerry Johnson told The Bookseller this morning that implementation was running behind schedule in a bid to "de-risk" the switchover. "It's entirely down to a desire to test it to destruction," he said. "We are aware of the importance of getting it right and not taking any risks with it."

Paul Smiddy, retail analyst at HSBC, described the announcement as "disappointing" but added that "given the circumstances they have made the correct commercial decision to postpone it". Robert Clark, an analyst at Retail Knowledge Bank, said any implementation of a new supply chain could cause problems. "Christmas is absolutely vital for Waterstone's, as with all retailers, and things could go badly wrong if you had untested new systems coming in place just before Christmas," he said. "So it makes sense to delay it."

The bookseller had originally planned to supply all 313 stores via a centralised distribution hub in Burton-Upon-Trent from September. However, it will now stagger the implementation, with the new supply chain being rolled out to the majority of Waterstone's stores from the new year. A smaller proportion of stores will receive books via Burton-Upon-Trent from before Christmas.

The retailer announced this morning that operating profits were flat at £16.3m for the year to 26th April. Turnover grew to £564.3m, a year-on-year growth of 5% and like-for-like growth of 3.3%. It reverses 2007's full year like-for-like sales drop of 4.1%.

Retail waterstone's gerry johnson HMV Graeme Neill Home hub

Comments on this article

By JULIAN RIVERS

It can't be wrong to delay this until after Christmas trading . Its is what is not said that is important here . Why have they been specific about a date and missed it , by a quarter of a year . [ at least ]? What has gone wrong in testing . ? You can be sure that they are not going to run this, because the risk of getting in a mess for Christmas trading is far too high . It would be interesting to know what publishers think about all this as they will be paying for the distribution centre ? I guess they will want a more secure [ and cheaper for them] option of status quo .

01 Jul 08 19:57

By ontheball

Is Julian Rivers the new Clive Keeble? Discuss.

01 Jul 08 21:16

By jez

much to restrained in comment to be the new clive

01 Jul 08 21:47

By Retired Publisher

Perhaps Clive Keeble is operating under a nom de plume ?

02 Jul 08 07:10

By JULIAN RIVERS

I try to restrict my comments to where I have personal experience , for better or worse . . Having had 36 years in all main sectors of the book trade I fear that that experience is extensive ,if not unblemished . By the way , why do so few people say who they are in these messages ...very strange . ?

02 Jul 08 19:41

By Matthew Perren

Ah, Julian, it's because they all work for corporate masters and are thus far too chicken to identify themselves.

05 Jul 08 20:19

By David R N Livesley - Woodstock Vermont

...and those of us who have taken up a different career can actually put into words what we used to say without fear of being sent to the remainder pile! T'is a shame that so many read these ramblings but so few seem to think they might express an opinion using a mystery identity... as ever 'umbly yours DavidBigNose!

05 Jul 08 21:44

By Alcibiades

So GJ has a desire "to test it to destruction"? The mind positively reels with the audacity of the concept. Why does my mind fill with words such as "oops", "cold" and " feet"? As for the results? Flat profits after the Potter finale? The story just gets better and better , I hear that already W staff at the Deansgate Branch have begun a 'sweep' on the date that Gerry will enter the great revolving door in the sky that constitutes Waterstones MD progression.

06 Jul 08 09:01

By Matthew Perren

Oh, so THAT'S why his oft seen publicity shot makes him look like he's permanently terrified: the rictus grin of the soon-to-be-sacked man. Of course a sacking that includes a whooping payoff can't be that bitter a blow.

07 Jul 08 20:20

By Alcibiades

Matthew, you are now being too unkind! Gerry's favourite publicity shot shows a "confident entrepreneurial outlook" to quote one W Regional Manager. GJ's plan to centralise distribution is visionary and more importantly will do away with all those "stroppy and difficult unpackers" that have plagued the business for years. That immediate cost saving in endless coffee and transistor radio batteries will no doubt help off-set future lost opportunities. On a more serious note, word at the Brentford Bunker is that worrying weaknesses are apparent in the plan and that the gnomes at HMV are becoming increasingly restless at the delay and lack of progress. The rush by the trade to agree with the post-Christmas delay can certainly be understood but surely they must know they are only delaying the ride on the rollercoaster? Perhaps the lucky girl at Deansgate who drew out "week commencing October 13th" may still be able to buy that Christmas hamper? There's a thought for the hub, turn all that spare capacity into managing the Christmas hamper trade.......is that the ghost of Farepack I hear?

07 Jul 08 21:04

By Matthew Perren

Hands up who remembers Sortation? History teaches us nothing does it? Of course, if, like Gerry, you are new to the trade then you won't even know that there was a lesson to be learnt from studying the past. Maybe next time they could try appointing an MD from within the trade. Radical, I know....

08 Jul 08 19:26

By JULIAN RIVERS

Waterstones got out of central distribution because it didn't work for them . Technically it was o.k through WHS in Swindon but it failed to meet the demands of a range bookseller . Nothing is going to be different here except this is a new centre with new systems . It will be a disaster for Waterstones. Everybody will get hysterical, publishers who are paying for this will see gaps where their books should be and by 2009/10 individuals will be "seeking new opportunities in their career paths ." You read it here first .

08 Jul 08 21:31

By PS

Some comments are a little harsh. GJ's been in charge of the big W for approaching 3 years and spent 4 years as MD of Booker Cash & Carry before that, so inferring that he's somehow underqualified to managing the implementation of a consolidation centre is ridiculous. And such a thing doesn't require a knowledge of Terry Pratchett's backlist, so suggesting that if someone with more book trade experience was MD, the delay would never have happened is similarly unfounded. If Nick Williams was in charge and there'd been a delay, everyone would be on here saying "Next time Waterstone's should appoint an MD with more out-of-trade experience". The most interesting element to this whole story happened about 6 months ago when the then supply chain director, Simon Blacklock, left the company. I'd be interested to know, but no doubt never will, what impact this had: Has the delay occurred because of Blacklock's exit or did Blacklock leave due to a projected delay?

09 Jul 08 13:08

By Robert Kinnear

Actually, Matthew history can teach us quite a lot if we care to take note-unfortunately as we both know from experience,Waterstone's people in Brentford have a habit of neither taking note of the past nor listening to those who have been through this sort of thing before.

09 Jul 08 16:17

By Matthew Perren

The point that I'm trying to make is the same as Julian's. It won't work. The number of suppliers is mind boggling; the number of individual product lines more so; there are over 300 branches with individual markets and hence individual needs. Booker Cash & Carry never dealt with as many variants as this. Certainly, back when I managed a large Waterstone's, I know that we carried more product lines than the nearby (very, very large) Sainsbury's. I fail to see how adding in a further layer into an already complex supply chain can possibly help Waterstone's become a better bookseller. Their ability to respond quickly to very localized bubbles of demand will be severely curtailed and will doubtless end up being manged by some clumsy work-around. And, as Julian says, publishers will just start to see more and more gaps open up on the shelves. I imagine, and I don't know, that Simon left because he could see what was going to happen and wanted to preserve his professional reputation before he became associated with this impending farrago.

09 Jul 08 18:56

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