News

Waterstone's sold, Daunt in, Myers out

Waterstone's has been sold to Alexander Mamut's A&NN Group for £53m.

In a surprise move, James Daunt will run the bookseller as its managing director when the deal completes, with current m.d. Dominic Myers to take a new role within its former parent HMV Group. The new owner has promised "an undiluted commitment to books and bookselling".

HMV Group made the announcement to the City this morning. Upon completion of the deal, £40m will be paid with another £13m paid on 31st October. Daunt Books itself will remain independently run, as now, by its existing shop management. There is no mention of any involvement from the chain's founder Tim Waterstone, who it had been widely reported was working on the deal with Mamut.

The new owner said Daunt intended to oversee a comprehensive review of the business and operations of the bookseller. Daunt told The Bookseller: “The main observation I would make is that I am on the outside still and I don’t come in until 2nd July. I’m not the money guy, I am coming in to run it . . . This is an important investment from A&NN which will secure a dynamic future for the UK’s largest bookshop chain. I look forward to working with Alexander and with the Waterstone’s team, and in particular to the challenge of restoring a faith in excellent bookselling to the heart of the business."

In an email to staff, Myers said he had “enjoyed” his time at Waterstone’s and thanked staff for their skill and support. He said: “Everything that has been done in the last year has been achieved through the skill, motivation and sheer hard work of the fantastic team at Waterstone's—I thank them for their massive support and am delighted that this process will now allow them to really flourish. I'm sure the entire industry will join me in also wishing my successor well.”
 
HMV’s c.e.o Simon Fox hailed Myers’ “inspirational” leadership and said he had “re-energised” the store and “the bookselling skills for which our stores are renowned have been successfully revived”. He added: “Dominic and his highly skilled team have also resolved many of the operational challenges faced by the company, including the hub. As a result, the profitability of Waterstone's has improved significantly compared to the prior year, and Dominic's leadership of the business in a challenging time for the industry has earned the recognition of our book trade partners.”  

The detail of the business plan and forward strategy would be "refined subsequently". Mamut said his investment had been inspired and motivated by the opportunity to refocus the core business of bookselling towards a renewed customer responsiveness. He said: "The opportunity ahead to reposition Waterstone’s as a regional and local community-orientated bookseller is an exciting one. The business enjoys a great loyalty from its customers and I believe that there is considerable integrity and value in the brand." Of Daunt, he said: "I am equally delighted that we will have in James Daunt an m.d. who shares my belief that Waterstone’s future success lies in an undiluted commitment to books and bookselling."

The deal, which HMV Group expects to go through by the end of June, is subject to shareholder approval, as well as the banks that have lent HMV Group cash. The retailer said banks were supportive of the disposal and were considering it in the light of the renegotiation of terms of money leant to HMV Group. However, it warned if it cannot renegotiate its debt, the sale will not go ahead.

HMV Group also revealed this morning Waterstone's had a like-for-like sales decline of 3.8% for the 12 months to the end of April with total sales down 4%. For the 17 weeks ending 30th April, like-for-like sales were down 8.4% and total sales down 11.3%. HMV Group blamed a "weak" book market and loss of share for the decline.

Nielsen BookScan figures show Waterstone's was performing worse than the wider book market. TCM sales were down 2.3% (£39m) year on year to £1.68bn, for the 52 weeks to 30th April. This year's TCM sales for the 17 weeks to 30th April were down 3.4% (£15.7m) year on year to £447m.

Mamut added: "We are extremely pleased to have reached an agreement to acquire Waterstone's and its great heritage. I believe that our investment and strategy will secure a dynamic future for the UK's largest selling bookshop chain and I look forward to working with its booksellers in building on the principle of excellent bookselling which is at the very heart of the business."

Verdict senior retail analyst Matt Piner said Mamut's purchase constituted a "gamble". He said: "Physical book stores have more of a lure than music stores, but this has not stopped them losing share to Amazon, supermarkets and latterly, e-readers and kindles. Mamut has shown real belief in the value of being the last man standing. In order for his investment to be successful he will have to continue restoring the specialist appeal of Waterstone's, as well as finding ways of ensuring it remains relevant as the digital market in particular continues to grow.”

Blog: Daunting times

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Hopefuly, we can have some positive comments from staff... heads down, guys, get on with your work, and let's hope the business moves forward.
Yes, there will probably be closures but fingers crossed, yeah?

PS - Bye bye, Mr Myers.

Hopefully the sale will be approved by all parties.

I would suggest that part of the current recent sales dip at Waterstone's is due to the chain being on stop with certain distributors and the reluctance of some sections of the publishing industry to get behind the chain in their hour of need.

If it's true about James Daunt, then Mamut couldn't send out a clearer signal that he wants Waterstone's to become the quality range bookseller that it used to be.

This is fantastic news for the staff - God knows they deserve it - and I think we should congratulate Mr Mamut who, at the final hour, paid far more for the chain than it's worth. Jobs will be a lot safer (apart from a few senior management positions) under the new ownership.

Now it's up to the publishers to support the new owners of Waterstone's and help to bring the customers back: better terms, head starts on the supermarkets for new titles, and help with getting big name authors in the stores. This Waterstone's last chance and they'll need all the help they can get.

I wrote the above before James Daunt had been confirmed as MD. I'm really pleased it's now official, but where's Tim Waterstone in all of this?

Thank god! now lets get on with getting this company out of the doldrums, stop wasting money on rubbish, treat your staff well and with respect and we might finally turn this mess about, hoping to see an end to a repressive bullying culture where staff are treated very badly indeed! and thank god we can actually STOCK books
Best of luck to all my fellow booksellers!))

I like it! Most people i know are desparte to supply Waterstones! But they can't supply what isn't ordered.

"An undiluted commitment to books and bookselling".

Is he saying that we'll be backing down from mugs, chocolate, etc?

finally i can hear the bells ringing.. thank god for alexander mamut. money and brains. i'm sure this will bring back the motivation for my colleagues, and there's hope yet we will finally get the place we so deserve on the high street ..can't wait for all the 'changes' he's going to bring.. wonder who or what (linksaves, KPI's) is going to be shown the door first !

Some good news about Waterstone's at last. I find it cheering that in spite of the corporate nonsense which has enveloped our biggest bookseller, it's still seen as 'our' bookseller. There is a lot of good will towards Waterstone's. I hope the new management team can take the benefit from this.

Thank goodness its finally gone through and we can get on with our jobs. I'm gonna miss myers tho, he was a good guy.

It works both ways you know, Clive.... "Some sections of the publishing industry" would have liked to see a more enthusiastic embrace of their product over the last 2-3 years by Waterstones, but apparently we can't all have what we want. Most publishers do not take lightly the decision to put a chain like Waterstones on stop.

This appears to be a bold offer for an ailing chain. It shows a level of commitment and some good sense too with Daunt at the helm. The future looks much rosier this morning I think.

Fantastic, fantastic news. A bookseller in charge, with a clear and admirable strategy. It's terrific, and as above, we can all get on with our jobs.

Terrific news - fingers crossed it all goes through OK. James Daunt is a proper bookseller, with the right ideas on stock, range, discounting, community etc. Let's hope he gives autonomy back to the stores. Publishers will be much more willing to back this new regime (or so I would hope).

Get on with our jobs? Some of us have been doing this throughout thanks very much.

Hopefully this will be good news, although we have that many branches not doing well I suspect we'll have some pain.

Looking forward to being able to get some range back in and hopefully a more stable promo structure.

Who is James Daunt btw?

So much nonsense has been produced over the years - that ridiculous "four quadrants" training module, 'Get Selling', the 'brand wheel', 'Feel Every Word'... The MDF shelves in my office buckled under the weight of countless ringbinder files and whenever I tried to read this material, it was just meaningless, badly written, patronising rubbish.

Mr Daunt should order a small skip for each shop so that managers can dump the whole lot and never think about it again.

Bill Clinton famously had a sign on his desk that said "It's the economy, stupid!". HMV could have done with one about Waterstone's - "It's the books, stupid!". Now, hopefully, managers will no longer waste most of their time worrying about campaign changeovers, KPIs, mystery shoppers and the like, so that they can get on with the business of creating a bookshop that is so wonderful, people keep coming back.

He was likeable on an individual level, but I would have had more respect for him if the changes he implemented had been more than cosmetic. One year after he took over, the bullying regional managers still had their jobs and staff were still being threatened with disciplinary action over trivial issues. The culture hadn't changed.

At last indeed, good luck to Waterstones let's hope Daunt can make it work for you and well done Simon Fox £53mil seems a great deal.

Good to be taken private to give us a chance to survive, but I have a worry about Daunt - a bookseller he may be (so was Dominic), but I can't see anywhere in his past that he has experience managing a £500m turnover business with 4,000 staff...

The main point here for everyone involved is that there is a light of certainty at the end of the tunnel and that normal trading for booksellers, publishers and customers can resume. James Daunt's appointment has the stamp of being Tim W's man all over it, so may indicate a change of strategy, but the chain will still have to consider the overall market share decline in the High Street versus its space there(that's the real High St everyone, not gilded Marylebone). BTW, Dominic Myers may have come to the golden W from hmv, but he worked with James Heneage when Waterstone's and Ottakars merged, before which he was MD of Blackwells - hardly an hmv stooge.

Some of us have been trying to get on with our jobs, but the whole "Don't order ANYTHING" debacle kind of got in our way....

Hopefuly, we can have some positive comments from staff... heads down, guys, get on with your work, and let's hope the business moves forward.
Yes, there will probably be closures but fingers crossed, yeah?

PS - Bye bye, Mr Myers.

But what of Dominics number 2 Michael Neil?

Hopefully the sale will be approved by all parties.

I would suggest that part of the current recent sales dip at Waterstone's is due to the chain being on stop with certain distributors and the reluctance of some sections of the publishing industry to get behind the chain in their hour of need.

I like it! Most people i know are desparte to supply Waterstones! But they can't supply what isn't ordered.

It works both ways you know, Clive.... "Some sections of the publishing industry" would have liked to see a more enthusiastic embrace of their product over the last 2-3 years by Waterstones, but apparently we can't all have what we want. Most publishers do not take lightly the decision to put a chain like Waterstones on stop.

This appears to be a bold offer for an ailing chain. It shows a level of commitment and some good sense too with Daunt at the helm. The future looks much rosier this morning I think.

Great news on the sale.

I don't agree publishers are at fault here though; Waterstone's simply stopped ordering books in March/April, even new books with lots of national publicity and top Amazon rankings - no orders at all from Watertsones! I think they were instructed to preserve cash in order to make sale work better financially for HMV. Let's hope they start ordering books soon.

If it's true about James Daunt, then Mamut couldn't send out a clearer signal that he wants Waterstone's to become the quality range bookseller that it used to be.

This is fantastic news for the staff - God knows they deserve it - and I think we should congratulate Mr Mamut who, at the final hour, paid far more for the chain than it's worth. Jobs will be a lot safer (apart from a few senior management positions) under the new ownership.

Now it's up to the publishers to support the new owners of Waterstone's and help to bring the customers back: better terms, head starts on the supermarkets for new titles, and help with getting big name authors in the stores. This Waterstone's last chance and they'll need all the help they can get.

I wrote the above before James Daunt had been confirmed as MD. I'm really pleased it's now official, but where's Tim Waterstone in all of this?

Thank god! now lets get on with getting this company out of the doldrums, stop wasting money on rubbish, treat your staff well and with respect and we might finally turn this mess about, hoping to see an end to a repressive bullying culture where staff are treated very badly indeed! and thank god we can actually STOCK books
Best of luck to all my fellow booksellers!))

"An undiluted commitment to books and bookselling".

Is he saying that we'll be backing down from mugs, chocolate, etc?

finally i can hear the bells ringing.. thank god for alexander mamut. money and brains. i'm sure this will bring back the motivation for my colleagues, and there's hope yet we will finally get the place we so deserve on the high street ..can't wait for all the 'changes' he's going to bring.. wonder who or what (linksaves, KPI's) is going to be shown the door first !

So much nonsense has been produced over the years - that ridiculous "four quadrants" training module, 'Get Selling', the 'brand wheel', 'Feel Every Word'... The MDF shelves in my office buckled under the weight of countless ringbinder files and whenever I tried to read this material, it was just meaningless, badly written, patronising rubbish.

Mr Daunt should order a small skip for each shop so that managers can dump the whole lot and never think about it again.

Bill Clinton famously had a sign on his desk that said "It's the economy, stupid!". HMV could have done with one about Waterstone's - "It's the books, stupid!". Now, hopefully, managers will no longer waste most of their time worrying about campaign changeovers, KPIs, mystery shoppers and the like, so that they can get on with the business of creating a bookshop that is so wonderful, people keep coming back.

Some good news about Waterstone's at last. I find it cheering that in spite of the corporate nonsense which has enveloped our biggest bookseller, it's still seen as 'our' bookseller. There is a lot of good will towards Waterstone's. I hope the new management team can take the benefit from this.

Thank goodness its finally gone through and we can get on with our jobs. I'm gonna miss myers tho, he was a good guy.

He was likeable on an individual level, but I would have had more respect for him if the changes he implemented had been more than cosmetic. One year after he took over, the bullying regional managers still had their jobs and staff were still being threatened with disciplinary action over trivial issues. The culture hadn't changed.

Fantastic, fantastic news. A bookseller in charge, with a clear and admirable strategy. It's terrific, and as above, we can all get on with our jobs.

Terrific news - fingers crossed it all goes through OK. James Daunt is a proper bookseller, with the right ideas on stock, range, discounting, community etc. Let's hope he gives autonomy back to the stores. Publishers will be much more willing to back this new regime (or so I would hope).

Get on with our jobs? Some of us have been doing this throughout thanks very much.

Hopefully this will be good news, although we have that many branches not doing well I suspect we'll have some pain.

Looking forward to being able to get some range back in and hopefully a more stable promo structure.

Who is James Daunt btw?

Some of us have been trying to get on with our jobs, but the whole "Don't order ANYTHING" debacle kind of got in our way....

Good God... had things really got that bad? I left the chain in July last year... probably would've ignored them and ordered stuff in anyway!

At last indeed, good luck to Waterstones let's hope Daunt can make it work for you and well done Simon Fox £53mil seems a great deal.

Good to be taken private to give us a chance to survive, but I have a worry about Daunt - a bookseller he may be (so was Dominic), but I can't see anywhere in his past that he has experience managing a £500m turnover business with 4,000 staff...

The main point here for everyone involved is that there is a light of certainty at the end of the tunnel and that normal trading for booksellers, publishers and customers can resume. James Daunt's appointment has the stamp of being Tim W's man all over it, so may indicate a change of strategy, but the chain will still have to consider the overall market share decline in the High Street versus its space there(that's the real High St everyone, not gilded Marylebone). BTW, Dominic Myers may have come to the golden W from hmv, but he worked with James Heneage when Waterstone's and Ottakars merged, before which he was MD of Blackwells - hardly an hmv stooge.

http://en.wikipedia.org/wiki/Daunt_Books

Terrific news. James Daunt. Impressive. Best of luck all.

The plan must be to reduce the number of shops to be nearer six rather than the current number. Why else would Daunt be the right man? He has no idea how to run a large chain.

Finally, some good news for Waterstone's and good news for HMV.
Firstly, I hope Waterstone's can focus on books in a sustainable way for the future. Similar needs to happen for HMV.
This is not the end for either chain, but as of now, Waterstone's is looking a better bet.
Good luck booksellers!

Great news. Combination of big business and specialist knowledge can only be positive.

Speaking as a reader, I'm thrilled to bits. Hope it all goes well financially. Terrific news.

Hopefully some bold new plans unlike the current scheme of renaming plans to make them sound new. If I were still a bookseller I'd be happy Myers is out, he will be leaving as a failed MD with losses on his CV and he can also take his stupid Ask Dominic email with him. All he did all day is copy paste templates responses to staff worries. Maybe also they will get some regional managers with common sense and not just employ ones because of the physical size of their head.

1. Close some stores that have been at a loss for 3 yes running.
2. Let the bookseller order books for their section.
3. Dial down the ereaders/RP love. If we can't perfect bookselling, how can we move onto something else. And also sell the technology that will eventually close physical stores down? If you want stores open, don't try to convert them to only reading books off a screen.

Love

BRILLIANT! I was a bookseller for 7 years under the HMV regime- I saw the HUB come in, harmonisation, ideal rotas, the four quadrants (Guess what Gerry- quadrant means 4!), redundancies, get selling, discover, HHT's, totes, uniforms and all that jazz. Sometimes it was really depressing- especially for the wage and no chance of a pay rise...However, I made some fantastic friends and am still astounded by the iron will and determination that everyone shows at shop level. The Booksellers deserve some respect because they've not given up- they've shown HMV they were wrong all along. Good luck and best wishes to all my friends and ex-collegues, I am so happy for you.
Mr. Daunt- two things you need to do first:
1. Abolish the awful purple T-shirts!
2. Cap up the w!

Dear Nobody,
You also saw the business become profitable.

RE Bert:
I don't see any mention of profits in the above article. Do you mean profits or just less losses?

Hi Ex bookseller,
If you read the company accounts Waterstones made 2.5m profit last year and are expected to make 5-10m this, its easy to criticise HMV but they are not the only retailler struggling in very tough times.

Even though it was more profitable before I joined? I would say it is less-so now.

You would say! as a PLC you can just read their accounts

Daunt Books is a fantastic chain which works well because they have excellent, knowledgeable booksellers who are the best paid in the business and stores that carry a deep, interesting range. However, this works as a business model because all Daunt shops are based in rich, exclusive parts of London. It is a model that cannot be replicated on a national scale. I wish Waterstones well under it's new owners but I hope people aren't expecting a return to the golden age of the eighties. There aren't enough dedicated, serious readers in this country to support that in the age of shortened attention spans, greater competition for reading time, e-books and Amazon.

"It is a model that cannot be replicated on a national scale."

Nonetheless it can be replicated in more places than you think. There are plenty of Jaffé and Neale-type bookshops doing surprisingly well with premium stock. Waterstones has, up to now, left them to it. Maybe it won't any more.

Jaffe and Neale, that's is primarily a cafe selling some books.

spot on Darran ... the Daunt model works (for the moment) because of the exclusive locations. Recent research shows that for every 100 'heavy' book buyers, 70 browse in store to shop later on line. Has Mamut bought Amazon's catalogue? More roubles than sense ... James Daunt was right when he said 'there will be no more chain booksellers in 3 years time'. What's changed his tune? The fact that sainsburys wins 'Bookseller of the year' should tell us everything we need to know about the future for high st retail booksellers.
The future is digital, online and supermarket discounted. The End.

Great news, and a wonderful appointment. Yes, it's going to be a challenge but if anyone can put the vision back in, it has to be James Daunt. What a relief!

Well good news of a sort if only that the staff will get another month pay. But ultimately Waterstones is doomed unless it adjust its proposition:

1) You cannot sell books at RRP any more.
2) Nothing else matters.

In an age of total price transparency, and where I can get a top ten bit of fiction in Tesco, nevermind Amazon, they have to get the headline price down.

They don't- it just means that you won't be a customer and they will become more specialst which is where the book market is heading.

Spot on Adam 34

I like the promise of "undiluted Commitment to books and bookselling". Does this mean real books and therefore not e-books? I hope so, becuase I miss been able to browse without been pushed in sales, and e-books do not encourage this.

I think it has to be better than staying with HMV!

Good luck all.

Any idea if the godawful Hub is part of the purchase? Or can he ditch Unipart as part of the deal?

At last a reality check from Darran amidst the euphoria. If Waterstones is to survive and make a return on capital for its new owners it will still have to try to inhabit the discounting middle ground and somehow bring occasional as well as heavy book-buyers back on to the high street in real numbers while maintaining margin. A compelling and different approach to the internet and e-books is also a top priority. These are tall orders in a business context in which Amazon, Google, Apple and supermarket chains are several years ahead of the discredited old Waterstones 'they will come' model. A commitment to the physical book is not enough.

Spot on Ancient Mariner

Wolves to stay in the premiership.

Hope you're right Stuart!

You were right!