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Waterstone's has confirmed that 20 stores will close over the next twelve months as part of cost-cutting measures across the wider HMV Group. Results published this morning (5th January), which showed Waterstone's performing better than sister chain HMV over Christmas, included the warning that full-year profits would be at the lower end of expectation, and that the group was close to breaking its loan agreements.
HMV has now committed itself to saving an additional £10m across the group over the next twelve months, including cutting 60 stores. Waterstone's initially declined to comment on store closures, but later conceded that the "40/20" figure referred to by a HMV Group spokesman was accurate. "We've nothing to say beyond that," the Waterstone's spokesperson said. The group comprises 285 HMV shops and 312 Waterstone's outlets.
Waterstone's m.d. Dominic Myers told The Bookseller this morning: "Obviously the group performance makes it clear that we need to deliver an improved cost performance, and a number of Waterstone's stores will close as part of that."
For the five weeks to 1st January, like-for-like and total sales fell 0.4% at Waterstone's. At HMV UK and Ireland like-for-likes slumped 13.6% and total sales were down 11.9%. For the 10 weeks to 1st January, Waterstone's like-for-like and total sales fell 2.1%. HMV UK and Ireland's like-for-likes dropped 14.1% and total sales by 12.6%.
Shares in the entertainment retailer fell by a quarter to 24.75p today, valuing the business at £140m, a decline in value of three-quarters over the past twelve months. The faltering share price has led to some analysts calling for a break up of the group. Nick Bubb, analyst at Arden Partners, said that a break-up "could just about keep the group alive".