News

Media reports on Waterstones' "torrid" results

Waterstones’ major losses posted in its financial results have received widespread coverage in the national press, with most focussing on m.d. James Daunt’s turnaround plans and current positive sales trend.

The Bookseller first reported Waterstones had made an operating loss of £25.4—increasing to £37.3m after tax—in the year to April 2012 as like-for-like sales had decreased by 11.1%, on Monday (4th February). Then, m.d. James Daunt told The Bookseller: "In a sense [the results] is so much what I inherited. Half the year was with them [HMV]. I don't know if you remember what kind of state it was in when I arrived—it was truly shocking."

The Telegraph reported yesterday (5th February) that Waterstones saw a like-for-like Christmas sales increase of 5% as Daunt’s turnaround plans come into fruition.

He called the results a “torrid” set but said the company had turned a corner over the last nine months, refurbishing its “dark” and “dank” shops to entice more customers. He added that after Russian billionaire Alexander Mamut bought Waterstones, the company faced an uphill struggle to fix problems such as restrictions on buying stock and supplier confidence. He told the newspaper that while 2013 results would have improved significantly the company was still likely to post a loss.

Retail Week has reported that Daunt insisted he would not “chase [market] share” at the expense of margins while he was in charge of the business.

He said: “We’re not chasing market share but we’re managing ourselves in a dramatically more efficient way.” He also reiterated the “shocking state” the business was in when he took charge of it after it was bought from the HMV Group, while adding that the company was down to a rate of 10% returns from 20-25% when Daunt took over.

He also said that there were no plans to overhaul Waterstones’ digital operation to compete more with Amazon. “In two years I doubt we’ll have a substantially bigger online offer; we have a competitor who already does that very well,” he said. “I want a business that generates cash, it’s got to be sustainable.”

Waterstones' results were also covered by the Daily Mail’s This is Money, the London Evening Standard and City AM.

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Wow - with the investment in stores and losses he is using nearly £1m week of cash. Some way to go before it becomes cash generative.

Fingers crossed - CV polished

For goodness sake - can we address some facts.

The 'truly shocking' business that Daunt inherited made £10m profit in the last full year of HMV ownership. Yes, that's profit.

Under his stewardship, it has plunged into a £40m loss. I cannot believe that the press are letting him get away with implying that the last full year results were the fault of HMV when he was in charge in all but 2 of those 12 months. Let's not forget he took over in June 2011 not June 2012.

On the face of it, Christmas sales results looked good, but that was due to Kindles. Strip them out and the underlying position is still downward. Furthermore, every Kindle sold is a lost future customer for Waterstones.

I am told that recent sales have been shocking with -20% not being uncommon.

And the stores look no different to 2 years ago (other than 'offers' no longer looking like offers!) so all this posturing about major transformation is just tosh.

Daunt is spouting complete untruths and the press (including The Bookseller are reporting it as fact! What happened to good old fashioned investigative journalism? Are the city / business editors asleep?

Well the reduction in returns is very welcome and certainly something we've noticed. Hopefully this is a sign of increasing efficency.

In Reality - what untruths is Daunt spouting? Let's have specifics. I can't see anything here that appears untrue. This is one of the most candid financial statements I've ever seen, and certainly appears more honest than many statements made by Waterstones in previous years. And I guess city editors aren't asleep, they're just not that interested in privately owned companies.

Chris I have to disagree with you and agree with Reality - there are plenty of facts: Profit is down from +10 to - 40. Sales for the whole year were down 11.1%, the worst result in the last 10 years. James was in charge for 10 of the 12 months including having 6 months to prepare for christmas. - They are all facts. On the positive side there are less returns. In stores we would rather have more sales than fewer returns.

There is nothing candid about his statement - he is simply blaming HMV. As for this years performance - who knows, but Kindles have been a large contributor to our sales over christmas and the last few weeks have been terrible. It took nearly a year for these results to be published; so allowing him to talk about them as being out of date, it was entirely his choice to delay them.

James had a lot to do and we need it to work, but it's been two years now. How about a candid statement on how we have done in the first half of this year including some facts on sales, profit and cash.

City editors aren't interested in private companies because private companies, unlike public companies, don't have to be candid or share results quickly.

Hi folks, some things worth keeping in mind.
1) Private companies have 10 months to file their prior year accounts, so there was nothing unusual about when Waterstones' published its figures, I wouldn't call it a delay;
2) We are talking fiscal 2011, including Christmas 2011, a poor year for the trade in general, and a very poor year for Waterstones -- all well documented this time last year (in The Bookseller);
3) I've yet to see a new management come into a business such as this and not get rid of a lot of stuff in year one, excess stock, restructuring, redundancies, in terms of financial performance the next set of accounts will be more useful;
4) Waterstones demonstrably had a better Christmas this year, ending the period with fewer books (or returns), and using fewer staff. We don't just take James' word for this, we speak to publishers. Even those publishers who were worried last year, have been heartened by the recent performance - perhaps not across all stores Leko, but in many, particularly the refurb'd shops;
5) The growth, which we now know to be about 5% over Xmas, does not include Kindle business; Daunt told us that that he doesn't factor in Kindle sales when he talks about the performance;
6) The business was cash generative, even in the year to end April 2012, profit isn't cash, profit is a good measure of how a company is performing, but cash is the petrol that keeps it going;
7) Sales declined at Waterstones in almost every year it was owned by HMV, the Ottakar's deal notwithstanding, and though they built the hub the group clearly left the stores in a pretty shabby state, the inheritance of which is pretty undeniable;

I've been looking at book trade accounts for a decade, and though useful you don't get a picture of current trading from looking at the figures as they are usually at least 10 months old, and good accountants will hide all the interesting bits. The best way of getting the full picture is to talk to the current management, this we did, and to their credit so did many of the nationals. We are the very opposite of asleep, Reality. To base an analysis of a business that is rapidly changing only on accounts that are 10 months old would have been myopic. Actually, irresponsible.

Its the next set of results which matter surely ?

Philip Jones makes some good points but misses the key points I am making.

It is a fact that under the last year of HMV ownership Waterstones delivered £10m profit and sales dropped by just 2.8%. In the first full year under Daunt it dropped to a £40m loss and double digit decline. He was in charge for 10 of those 12 months. You can't blame the previous owners when you have made it significantly worse than it was before!

Although I cannot reveal my (senior) sources, I know that the figure quoted for Christmas DOES include the (one off) upside of Kindles. Strip them out and the performance was adverse. Christmas 2012 will have no benefit as Kindle sales will be like-for-like and all those new eBook buyers will use Amazon not Waterstones.

Underlying current performance is dire, with double digit decline the norm.

Yes there are less returns, but as a previous poster observed, most shops would rather have more returns and more sales.

Talking to management is only informative when they tell you the truth, not what they want you to believe in order that they can save face in the eyes of the industry.

There have been a number of senior people within Waterstones highlighting the above points. They have gradually been fired with those remaining only seeing the Emperors new clothes.

Things were not always rosy under HMV (the Hub implementation, although the right thing to do, was an unmitigated disaster) but Dominic Myers was the best MD the company had ever had and had a clear and workable plan. With the cash injection from Alexander Mamut I believe he would have delivered a massively improved performance over that which is currently being delivered.

Modernised shops may look and perform a bit better, but you'd be worried if they didn't. The rest look worse than under HMV. 'Offers' are under promoted, displays aren't enticing and service has dropped off the radar.

All I am asking is that the reporting reflects the facts and not the spin.

"Senior" sources. Right.

I remember vividly the latter days of HMV ownership - you say Waterstones made £10m profit (which is indeed true) but following Christmas 2010, which was also pretty bad with 2011, there was a massive rationing of stock, resources and general spending within the chain. There was next to no cash in the business, let alone the fundamental lack of investment from the absent landlord for years upon years, so stock dropped off, sales dropped away completely and profits slumped far into the red as HMV tried to squeeze every penny out of the Waterstones sale they could to let the main business survive as long as it could before the next bank loan came in. The legacy of these kind of issues has continued to affect the business, even with sustained capital investment and changes within management, and aren't solved in one or two financial years. It takes time to fix this, which is something Waterstones doesn't have (but that's the issue at hand isn't it?)

As for the Kindles, well, you could be right. You could quite equally be wrong too. Forgive me if I don't put my faith in unknown sources to which only you have 'public access' and for which there is no supporting available evidence. And the terrible underlying performance? Again, we don't have the evidence and probably won't until it is greatly out of date - like the above performance figures. I will say though if you're wondering that my store did well over Christmas, and I also asked in my parents local store, and they also said they did well. Two stores out of 288 is hardly a decent cross section, but I'm not claiming to know the whole picture.

As for the supposed drop in Service, offers and displays - Service from staff was far worse under HMV because of exceptionally low morale and a belated and under supported attempt at training, corrected in recent times with the proper funding (although it's still not perfect). Previous offers were completely unsustainable, with loss leaders the norm, a 3for2 which as Daunt pointed out when he scrapped it just didn't draw anyone in anymore, and the displays... well, I miss not being able to be massively creative like you were under Myers, but they're a damn sight better than they used to be IMHO.

As for your fired managers. You say they brought up uncomfortable truths. The other side of that coin I heard is that those managers were er, 'stubbornly' stuck in a mindset, which was to say politely, 'not compatible' with the new direction of Waterstones. Not saying I agree with 'The Emperor' on all things, but I have seen the results in my limited view of my store and it's worked fantastically. We grew this Christmas for the first time after years of decline, and it wasn't all down to the Kindles. Indeed, a lot of it was down to the books.

There's plenty still to do, and plenty that will likely not go as fully planned, but that's business. You adapt and you change, and so Waterstones isn't like it was anymore. Good, in my opinion. Not so good in yours. But Reality, while I'm all for pragmatism and honesty when doing/discussing business, I just get the impression you want Waterstones to fail. You may not, and forgive me for the accusation if you don't, but that's what you keep seemingly saying - the new way has failed, return to the old.

HMV's failure is a clear indication we should not. I can only hope we can make it through to the other side with the new direction, whatever form we're in.

Well said ! This is why the next set of figures really matter. Time is not on Waterstones side but I personally wish them well.

I don't think we are miles apart 'Someother Bookseller'.

There was indeed a lack of investment under HMV that bordered on neglect and the stock restrictions to help cash flow were crippling. None the less, this approach, whilst uncomfortable, kept Waterstones profitable - a situation it no longer finds itself in. Like them or not, 3 for 2 campaigns were always the most successful campaigns at Waterstones, that's why they lasted so many years. Many trials were conducted to try to replace the mechanic and those shops that were on the trials pleaded to have 3 for 2 reinstated as their sales plummeted.

There are still plenty of 'offers' in Waterstones, but they are invisible. Tacky though the old display material was, it dragged in the punters and they parted with their cash. Under the new approach, there is nothing to draw in NEW customers from the likes of WHS. Waterstones cannot rely on existing customers alone as these customers are rapidly defecting to Kindles and Amazon.

If Daunt was making the sort of comments that he now is 12 months ago I would have more sympathy, but he has been in charge for the thick end of 2 years now and if Mamut decides to pull the plug on his investment I do not believe that the business would be attractive, other than perhaps around 60 shops. That's no legacy of a turnaround. Again, the words don't support the facts.

I refuse to be drawn on my sources but, unlike previous posters, I don't base my comments on anecdotal feedback from one or two shops. Others may be fooled by the Mr Grace style response ("we're all doing very well") but if you talk to those with visibility of the performance of all 285 shops a different picture emerges.

Please do not misunderstand me. I would be devastated if Waterstones fails. It would leave a cultural gap in our high streets that would never be replaced. Nobody will ever come up with a business case in the future for a chain of shops selling physical books in an increasingly digital / online world.

A return to the old ways is not the answer, but the current approach isn't working.

This will be my last post as I don't think the tit-for-tat approach is helpful (least of all for Waterstones) so I will conclude my last post with some constructive suggestions;

Shop Closures - As lease renewals / deals allow, rapidly close those shops that are heavy loss makers and will never again (regardless of approach) turn a profit. Sadly, I reckon this will now be well over 100 shops, possibly more, but that will help the remaining business survive and is less painful than 200+ closures that will follow an administration once Mamut gets fed up pumping cash into a black hole.

Promote Value - Where offers are present, shout about them in windows, on displays and in the books. Don't be afraid to use red - every other retailer uses it and for good reason.

Trial 3 for 2 - the results may surprise you!

Leisure Destinations - The only retail outlets always full these days are coffee shops. There are still too many Waterstones shops without them. If they can be squeezed in they will always return more than an equivalent space to books.

Diversification - The current business model has no longevity. Physical books plus Kindles (with the one-way traffic that they generate) are not enough. Most Waterstones shops are now over spaced in relation to sales. Find exciting new products to tighten the slack.

Listen to those (remaining) staff with an opinion - I accept that one or two of the most recent departures have been overdue, but there is a clear pattern that anyone challenging the current approach is shown the door. No leader gets it right 100% of the time and being surrounded by 'yes men' isn't healthy. This is Waterstones, not China or North Korea!

Be honest - with the staff and the media. Stop blaming those that went before. Too much time has now passed. Waterstones is still a much loved brand and if it goes under I believe that there would be far more outcry than other (larger) retail failures. It could be a risky approach, but a bit more honesty that the business is in difficulty could elicit more support from consumers who are promiscuous now in their shopping habits but would be up in arms if their local Waterstones was no more.

Whatever approach is taken, I genuinely wish everyone at Waterstones well. Your country needs you!

A blogger made an interesting comparison between Waterstones and the plight of the giant Panda, both survive percariously with large injections of cash to keep them from extinction, pethaps for romantic reasons, ie Pandas dont breed well, consume vast swaths of bambo forests and would die off if left to natural causes, Waterstones carries on at a loss only making money from stationery and e-books rather like a upmarket Smiths with a delusion that most 250 odd stores will be retained. Almost all of Waterstones is centrally controlled with a token nod to localism but mostly the job is tick boxing central edict spreadsheets. I see Waterstones as a zombie company that will shuffle forward for 18 months before it is stripped back to a metropolitan chain with a few token shops in larger towns if that. It doesnt have a business model unless its niche luxury which it isnt

Wow - with the investment in stores and losses he is using nearly £1m week of cash. Some way to go before it becomes cash generative.

Fingers crossed - CV polished

For goodness sake - can we address some facts.

The 'truly shocking' business that Daunt inherited made £10m profit in the last full year of HMV ownership. Yes, that's profit.

Under his stewardship, it has plunged into a £40m loss. I cannot believe that the press are letting him get away with implying that the last full year results were the fault of HMV when he was in charge in all but 2 of those 12 months. Let's not forget he took over in June 2011 not June 2012.

On the face of it, Christmas sales results looked good, but that was due to Kindles. Strip them out and the underlying position is still downward. Furthermore, every Kindle sold is a lost future customer for Waterstones.

I am told that recent sales have been shocking with -20% not being uncommon.

And the stores look no different to 2 years ago (other than 'offers' no longer looking like offers!) so all this posturing about major transformation is just tosh.

Daunt is spouting complete untruths and the press (including The Bookseller are reporting it as fact! What happened to good old fashioned investigative journalism? Are the city / business editors asleep?

Well the reduction in returns is very welcome and certainly something we've noticed. Hopefully this is a sign of increasing efficency.

In Reality - what untruths is Daunt spouting? Let's have specifics. I can't see anything here that appears untrue. This is one of the most candid financial statements I've ever seen, and certainly appears more honest than many statements made by Waterstones in previous years. And I guess city editors aren't asleep, they're just not that interested in privately owned companies.

Chris I have to disagree with you and agree with Reality - there are plenty of facts: Profit is down from +10 to - 40. Sales for the whole year were down 11.1%, the worst result in the last 10 years. James was in charge for 10 of the 12 months including having 6 months to prepare for christmas. - They are all facts. On the positive side there are less returns. In stores we would rather have more sales than fewer returns.

There is nothing candid about his statement - he is simply blaming HMV. As for this years performance - who knows, but Kindles have been a large contributor to our sales over christmas and the last few weeks have been terrible. It took nearly a year for these results to be published; so allowing him to talk about them as being out of date, it was entirely his choice to delay them.

James had a lot to do and we need it to work, but it's been two years now. How about a candid statement on how we have done in the first half of this year including some facts on sales, profit and cash.

City editors aren't interested in private companies because private companies, unlike public companies, don't have to be candid or share results quickly.

Hi folks, some things worth keeping in mind.
1) Private companies have 10 months to file their prior year accounts, so there was nothing unusual about when Waterstones' published its figures, I wouldn't call it a delay;
2) We are talking fiscal 2011, including Christmas 2011, a poor year for the trade in general, and a very poor year for Waterstones -- all well documented this time last year (in The Bookseller);
3) I've yet to see a new management come into a business such as this and not get rid of a lot of stuff in year one, excess stock, restructuring, redundancies, in terms of financial performance the next set of accounts will be more useful;
4) Waterstones demonstrably had a better Christmas this year, ending the period with fewer books (or returns), and using fewer staff. We don't just take James' word for this, we speak to publishers. Even those publishers who were worried last year, have been heartened by the recent performance - perhaps not across all stores Leko, but in many, particularly the refurb'd shops;
5) The growth, which we now know to be about 5% over Xmas, does not include Kindle business; Daunt told us that that he doesn't factor in Kindle sales when he talks about the performance;
6) The business was cash generative, even in the year to end April 2012, profit isn't cash, profit is a good measure of how a company is performing, but cash is the petrol that keeps it going;
7) Sales declined at Waterstones in almost every year it was owned by HMV, the Ottakar's deal notwithstanding, and though they built the hub the group clearly left the stores in a pretty shabby state, the inheritance of which is pretty undeniable;

I've been looking at book trade accounts for a decade, and though useful you don't get a picture of current trading from looking at the figures as they are usually at least 10 months old, and good accountants will hide all the interesting bits. The best way of getting the full picture is to talk to the current management, this we did, and to their credit so did many of the nationals. We are the very opposite of asleep, Reality. To base an analysis of a business that is rapidly changing only on accounts that are 10 months old would have been myopic. Actually, irresponsible.

Its the next set of results which matter surely ?

Philip Jones makes some good points but misses the key points I am making.

It is a fact that under the last year of HMV ownership Waterstones delivered £10m profit and sales dropped by just 2.8%. In the first full year under Daunt it dropped to a £40m loss and double digit decline. He was in charge for 10 of those 12 months. You can't blame the previous owners when you have made it significantly worse than it was before!

Although I cannot reveal my (senior) sources, I know that the figure quoted for Christmas DOES include the (one off) upside of Kindles. Strip them out and the performance was adverse. Christmas 2012 will have no benefit as Kindle sales will be like-for-like and all those new eBook buyers will use Amazon not Waterstones.

Underlying current performance is dire, with double digit decline the norm.

Yes there are less returns, but as a previous poster observed, most shops would rather have more returns and more sales.

Talking to management is only informative when they tell you the truth, not what they want you to believe in order that they can save face in the eyes of the industry.

There have been a number of senior people within Waterstones highlighting the above points. They have gradually been fired with those remaining only seeing the Emperors new clothes.

Things were not always rosy under HMV (the Hub implementation, although the right thing to do, was an unmitigated disaster) but Dominic Myers was the best MD the company had ever had and had a clear and workable plan. With the cash injection from Alexander Mamut I believe he would have delivered a massively improved performance over that which is currently being delivered.

Modernised shops may look and perform a bit better, but you'd be worried if they didn't. The rest look worse than under HMV. 'Offers' are under promoted, displays aren't enticing and service has dropped off the radar.

All I am asking is that the reporting reflects the facts and not the spin.

"Senior" sources. Right.

I remember vividly the latter days of HMV ownership - you say Waterstones made £10m profit (which is indeed true) but following Christmas 2010, which was also pretty bad with 2011, there was a massive rationing of stock, resources and general spending within the chain. There was next to no cash in the business, let alone the fundamental lack of investment from the absent landlord for years upon years, so stock dropped off, sales dropped away completely and profits slumped far into the red as HMV tried to squeeze every penny out of the Waterstones sale they could to let the main business survive as long as it could before the next bank loan came in. The legacy of these kind of issues has continued to affect the business, even with sustained capital investment and changes within management, and aren't solved in one or two financial years. It takes time to fix this, which is something Waterstones doesn't have (but that's the issue at hand isn't it?)

As for the Kindles, well, you could be right. You could quite equally be wrong too. Forgive me if I don't put my faith in unknown sources to which only you have 'public access' and for which there is no supporting available evidence. And the terrible underlying performance? Again, we don't have the evidence and probably won't until it is greatly out of date - like the above performance figures. I will say though if you're wondering that my store did well over Christmas, and I also asked in my parents local store, and they also said they did well. Two stores out of 288 is hardly a decent cross section, but I'm not claiming to know the whole picture.

As for the supposed drop in Service, offers and displays - Service from staff was far worse under HMV because of exceptionally low morale and a belated and under supported attempt at training, corrected in recent times with the proper funding (although it's still not perfect). Previous offers were completely unsustainable, with loss leaders the norm, a 3for2 which as Daunt pointed out when he scrapped it just didn't draw anyone in anymore, and the displays... well, I miss not being able to be massively creative like you were under Myers, but they're a damn sight better than they used to be IMHO.

As for your fired managers. You say they brought up uncomfortable truths. The other side of that coin I heard is that those managers were er, 'stubbornly' stuck in a mindset, which was to say politely, 'not compatible' with the new direction of Waterstones. Not saying I agree with 'The Emperor' on all things, but I have seen the results in my limited view of my store and it's worked fantastically. We grew this Christmas for the first time after years of decline, and it wasn't all down to the Kindles. Indeed, a lot of it was down to the books.

There's plenty still to do, and plenty that will likely not go as fully planned, but that's business. You adapt and you change, and so Waterstones isn't like it was anymore. Good, in my opinion. Not so good in yours. But Reality, while I'm all for pragmatism and honesty when doing/discussing business, I just get the impression you want Waterstones to fail. You may not, and forgive me for the accusation if you don't, but that's what you keep seemingly saying - the new way has failed, return to the old.

HMV's failure is a clear indication we should not. I can only hope we can make it through to the other side with the new direction, whatever form we're in.

Well said ! This is why the next set of figures really matter. Time is not on Waterstones side but I personally wish them well.

I don't think we are miles apart 'Someother Bookseller'.

There was indeed a lack of investment under HMV that bordered on neglect and the stock restrictions to help cash flow were crippling. None the less, this approach, whilst uncomfortable, kept Waterstones profitable - a situation it no longer finds itself in. Like them or not, 3 for 2 campaigns were always the most successful campaigns at Waterstones, that's why they lasted so many years. Many trials were conducted to try to replace the mechanic and those shops that were on the trials pleaded to have 3 for 2 reinstated as their sales plummeted.

There are still plenty of 'offers' in Waterstones, but they are invisible. Tacky though the old display material was, it dragged in the punters and they parted with their cash. Under the new approach, there is nothing to draw in NEW customers from the likes of WHS. Waterstones cannot rely on existing customers alone as these customers are rapidly defecting to Kindles and Amazon.

If Daunt was making the sort of comments that he now is 12 months ago I would have more sympathy, but he has been in charge for the thick end of 2 years now and if Mamut decides to pull the plug on his investment I do not believe that the business would be attractive, other than perhaps around 60 shops. That's no legacy of a turnaround. Again, the words don't support the facts.

I refuse to be drawn on my sources but, unlike previous posters, I don't base my comments on anecdotal feedback from one or two shops. Others may be fooled by the Mr Grace style response ("we're all doing very well") but if you talk to those with visibility of the performance of all 285 shops a different picture emerges.

Please do not misunderstand me. I would be devastated if Waterstones fails. It would leave a cultural gap in our high streets that would never be replaced. Nobody will ever come up with a business case in the future for a chain of shops selling physical books in an increasingly digital / online world.

A return to the old ways is not the answer, but the current approach isn't working.

This will be my last post as I don't think the tit-for-tat approach is helpful (least of all for Waterstones) so I will conclude my last post with some constructive suggestions;

Shop Closures - As lease renewals / deals allow, rapidly close those shops that are heavy loss makers and will never again (regardless of approach) turn a profit. Sadly, I reckon this will now be well over 100 shops, possibly more, but that will help the remaining business survive and is less painful than 200+ closures that will follow an administration once Mamut gets fed up pumping cash into a black hole.

Promote Value - Where offers are present, shout about them in windows, on displays and in the books. Don't be afraid to use red - every other retailer uses it and for good reason.

Trial 3 for 2 - the results may surprise you!

Leisure Destinations - The only retail outlets always full these days are coffee shops. There are still too many Waterstones shops without them. If they can be squeezed in they will always return more than an equivalent space to books.

Diversification - The current business model has no longevity. Physical books plus Kindles (with the one-way traffic that they generate) are not enough. Most Waterstones shops are now over spaced in relation to sales. Find exciting new products to tighten the slack.

Listen to those (remaining) staff with an opinion - I accept that one or two of the most recent departures have been overdue, but there is a clear pattern that anyone challenging the current approach is shown the door. No leader gets it right 100% of the time and being surrounded by 'yes men' isn't healthy. This is Waterstones, not China or North Korea!

Be honest - with the staff and the media. Stop blaming those that went before. Too much time has now passed. Waterstones is still a much loved brand and if it goes under I believe that there would be far more outcry than other (larger) retail failures. It could be a risky approach, but a bit more honesty that the business is in difficulty could elicit more support from consumers who are promiscuous now in their shopping habits but would be up in arms if their local Waterstones was no more.

Whatever approach is taken, I genuinely wish everyone at Waterstones well. Your country needs you!

A blogger made an interesting comparison between Waterstones and the plight of the giant Panda, both survive percariously with large injections of cash to keep them from extinction, pethaps for romantic reasons, ie Pandas dont breed well, consume vast swaths of bambo forests and would die off if left to natural causes, Waterstones carries on at a loss only making money from stationery and e-books rather like a upmarket Smiths with a delusion that most 250 odd stores will be retained. Almost all of Waterstones is centrally controlled with a token nod to localism but mostly the job is tick boxing central edict spreadsheets. I see Waterstones as a zombie company that will shuffle forward for 18 months before it is stripped back to a metropolitan chain with a few token shops in larger towns if that. It doesnt have a business model unless its niche luxury which it isnt