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Waterstone's has reported an "improved" performance since the end of its last financial year with the rate of sales decline slowing in the past five months, and growth in ebook sales of 73%. Waterstone's managing director Dominic Myers described the result as "encouraging" with the chain beginning to see the "fruits of the initiatives we talked about in March".
According to a trading statement released by parent company HMV total sales at the retailer fell by 1.6% in the 19 weeks ended 4th September, with like-for-like sales down by 2.6%. This shows that sales have improved since April when like-for-like sales dropped by 4.8% and total sales declined 4.3% in the 16 weeks ended 24th April.
The figures are the first that solely cover a period since Myers took the helm in January. He told The Bookseller: "The likes-for-likes are going in the right direction, and we are on a continuing trajectory. There has been a signicant change to the quality of range in a number of our stores, and we are beginning to see the benefits of that. We are very happy with the service to stores from the hub, and that has allowed booksellers to do what they are good at, which is put the right titles in front of people."
Myers said the chain was "exceeding" its target for local sales, with the returns seen from the space allocated to this range better than what they were previously getting from the same space. "There are a number of stores that have performed exceptionally well in terms of their local sales, and they are in the double-digits in terms of the mix [of overall sales]."
Myers said the chain had put between £6m to £7m of new titles into its backlist as a result of its ongoing range review, which was now 75% complete. Myers conceded this had led to a "big spike" in returns of certain very slow selling titles, but said that overall the returns figure was not significantly higher than last year. He said Waterstone's had seen "strong share growth" in non-fiction, and "good share growth" in the deep range areas.
The chain also highlighted a 73% increase in sales of e-books, with 1m sold over the period, though Myers was critical of the pricing strategy of competitors such as Amazon, which has heavily discounted some Kindle editions. "We want to be competitive but there has been some very aggressive pricing going on recently which I'm not sure is in the interests of the industry." Myers confirmed that the chain was not selling e-books on agency terms, and said that discussions were ongoing with publishers over the possible shift in arrangements brought about by Apple's entrance into the market.
On the recent media speculation about Waterstone's future within the HMV Group, Myers denied that there was pressure from investors to hive off the book chain. "As Simon [Fox, HMV Group chief executive] has said the business is not for sale, we are not aware of any pressure from shareholders to change that situation, we are just very focused on delivering our Christmas." Myers noted that Tim Waterstone, who it was reported in the Observer was interested in buying back the business he founded in the 1980s, was holding a book signing at Waterstone's Kensington next week, with Myers adding that "we are very pleased that Tim is supporting what we are doing".
Sales for the book chain were actually healthier than those seen at sister chain HMV, with HMV UK & Ireland seeing like-for-like sales dip by 14.9% and total sales growth falling by 13.9%. Fox said the first quarter of the financial year had been "difficult" and said that the World Cup "disrupted the pipeline for new entertainment product".
Fox added: "We continue to make good progress on all three parts of our strategy, including the turnaround of Waterstone's, where the initiatives to strengthen our specialist positioning, localise our store offer and revitalise our market leading brand have had a positive impact on trading."
The interim management statement said the book hub "continues to operate successfully" and the top 20 stores had now been successfully refitted. Myers said a further three stores would be refitted this year, with more to follow after the peak Christmas sales season, though added that improved children's departments would be rolled out this year in more stores, following trials.
Overall, Myers added: "We are pleased with progress so far, encouraged by the way the market is moving and confident about our preparations for Christmas."