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Waterstone's sold, Daunt in, Myers out
20.05.11 | Lisa Campbell, Philip Jones and Graeme Neill
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.”
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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....
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