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HMV could be open to private equity bid claims analyst
04.03.10 | Graeme Neill
HMV's share performance could make it a target for private equity bidders, an influential retail analyst has claimed.
Arden Securities' Nick Bubb said despite its position as the "last man standing" on the British high street after the demise of Zavvi and Woolworths, "[HMV's] shares have been very poor performers".
He said: "This reflects the market's long-term concerns about the digital threat, the competition from supermarkets and online players and the worry about the future of Waterstone's, while investors also appear unconvinced about the diversification into live music, via the £46m acquisition of the MAMA group."
HMV will unveil its new three-year plan and Waterstone's strategy at an analysts' presentation on 26th March. Bubb said: "Management are very focused on realising shareholder value and ultimately we expect the market to give the group more of the benefit of the doubt. If not, then HMV will be very vulnerable to a private equity bid."
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I'm worried about the future of Waterstone's - it seems everyone is keen to predict it's downfall.
I had an argument in the pub last week (yes, we talk about the book trade whilst in the pub... terrible, eh?) about this, and it seems everyone thinks the majority of under-performing stores will be closed after xmas.
The problem, Dan, is that they can't "shut the underperfoming stores", because they all have leases which prevent that happening. It is only if the whole company goes down that such an action is possible. It is very worrying indeed. Hold on to your hats. It is the cash situation that will determine what occurs and when.-- unless, as the article suggests, a private buyer comes in and one assumes splits the company in two. That probably would be best.
Borders sold eight of their Books Etc stores, and bought out the leases so they could get rid of them... there's no reason why the Big W wouldn't/couldn't do that for some underperforming stores also.
Yes, but that was a while ago and there was a buyer for some of the Books Etc stores (called W). There may no longer be. And neither might there be cash for buying the way out of leases. Not so easy.
Will book sales continue to migrate from the high street to Amazon and the supermarkets, or will they eventually bottom out? Nobody knows and I don't envy Dominic Myers. But one thing is certain: Waterstone's is unlikely to weather the storm unless they slim down to a more sustainable size.
This news doesn't surprise me one bit. I'm just glad I'm finally out of Waterstone's. I was there for a good few years and although I was pleased Gerry Johnson got the boot I still felt uncertain about the future of the company and my job. My bet is they will start closing stores. For example, there are 3 branches in Coventry.. 2 of them are bound to close sooner or later. And after their cull of booksellers last year it's only a matter of time before they turn their attention to the superfluous management/head office bods...
I'm worried about the future of Waterstone's - it seems everyone is keen to predict it's downfall.
I had an argument in the pub last week (yes, we talk about the book trade whilst in the pub... terrible, eh?) about this, and it seems everyone thinks the majority of under-performing stores will be closed after xmas.
The problem, Dan, is that they can't "shut the underperfoming stores", because they all have leases which prevent that happening. It is only if the whole company goes down that such an action is possible. It is very worrying indeed. Hold on to your hats. It is the cash situation that will determine what occurs and when.-- unless, as the article suggests, a private buyer comes in and one assumes splits the company in two. That probably would be best.
Borders sold eight of their Books Etc stores, and bought out the leases so they could get rid of them... there's no reason why the Big W wouldn't/couldn't do that for some underperforming stores also.
Yes, but that was a while ago and there was a buyer for some of the Books Etc stores (called W). There may no longer be. And neither might there be cash for buying the way out of leases. Not so easy.
Will book sales continue to migrate from the high street to Amazon and the supermarkets, or will they eventually bottom out? Nobody knows and I don't envy Dominic Myers. But one thing is certain: Waterstone's is unlikely to weather the storm unless they slim down to a more sustainable size.
This news doesn't surprise me one bit. I'm just glad I'm finally out of Waterstone's. I was there for a good few years and although I was pleased Gerry Johnson got the boot I still felt uncertain about the future of the company and my job. My bet is they will start closing stores. For example, there are 3 branches in Coventry.. 2 of them are bound to close sooner or later. And after their cull of booksellers last year it's only a matter of time before they turn their attention to the superfluous management/head office bods...