Gerry's winter of discontent

<p>Gerry Johnson has paid the price for poor results, as retail chiefs tend to do, but bad luck has played a part too. The collapse of Borders just before Christmas threw a wave of heavily discounted stock into the market, whilst the harshest winter for 30 years must have affected footfall.<br />
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I also think he was not supported enough by HMV Group, which has been putting a lot of time and money into rebuilding HMV, which has moved into live venues for music and film, leaving Waterstone's with not enough investment in storefit, for example.<br />
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But other problems clearly were of his own making, particularly the dreaded hub, which suffered from enormous teething problems in its first few weeks and even now is not functioning at 100% efficiency &ndash; although ironically this week publishers have been telling us privately that it is more or less fixed. The hub launch was delayed from the spring and he could have put it back post-Christmas, but the gamble was taken to get into live in September in time for the huge Christmas market and reap the efficiency savings.&nbsp; <br />
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Staff became disillusioned that they couldn't get books to customers quickly enough, and a sour tone crept into comments on our website when we reported the problems, which led to Gerry famously banning it, or rather banning Waterstone's staff from accessing it. Predictably, this just meant they were all the more keen to post on it and read it from home.<br />
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But it shouldn't be forgotten what a thankless task it can be running Waterstone's. As the nation's leading cultural retailer it obsesses the chattering classes in a way that a business like say Wilkinson's never can. For example, earlier this autumn the Guardian devoted the first half of G2 to a long and quite unfair attack on Waterstone's, accusing it of all manner of sins and of failing to stock the sort of obscure books they expected to find there. For Gerry, it was a big change from Booker and Allied Carpets where he had cut his management teeth.<br />
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When he arrived at the helm of Waterstone's at the beginning of 2005 he was a breath of fresh air after the previous regime: a pragmatic, professional retailer with a common-sense approach mercifully free of the book trade's tendency to pretension.<br />
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He handled the Ottakar's acquisition with aplomb on a technical level and he has sorted out the distribution system. What HMV seemed to have wanted was for him to outperform the book market, which, at a narrow GRM level he was doing in the last five weeks&nbsp; (Waterstone's down 8.5 % like-for-like, GRM down 9.5% year on year for the five weeks to Jan 2nd) by a bigger margin.<br />
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HMV wanted more excitement around books in Waterstone's, and for the brand to champion books more and promote discounts and prices less. They also seem to want the stores to reflect local tastes better. But up against the might of the supermarkets on the one hand, and the range of Amazon on the other, Gerry was trying to fight too many battles on too many fronts.<br />
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In the end he gave it his best shot; he ran out of time and the market turned against him, but not all his problems were of his own making.</p>
<p>It'll be interesting to see how new m.d. Dominic Myers handles this troublesome but necessary beast. There will be many concerned trade voices wishing him success, and just as many with an opinion on what he should do. One advantage is that with Borders now closed, the bad winter all but behind us, and the hub now performing well, he will be able to focus on re-energising the business. We wish him well.</p>