Ottakar's helps kick-start Waterstone's

Ottakar's helps kick-start Waterstone's

<p>The purchase of Ottakar&#39;s has helped spark the first signs of a recovery at Waterstone&#39;s, with HMV c.e.o. Simon Fox telling analysts that the rebranded former Ottakar&#39;s branches have been outperforming Waterstone&#39;s own stores.</p><p><a href="../news/41334-waterstones-sees-green-shoots.html" title="waterstones-sees-green-shoots">Results put out today</a>, showed that the enlarged business recorded a 0.6% rise in like-for-like sales for the period after its financial year-end to 23rd June thanks to an &quot;improved market&quot;. Despite this analysts spoken to by The Bookseller said it was too early to talk of a turnround.</p><p>The retailer has been boosted by the inclusion of Ottakar&#39;s in its like-for-like figures for the first time, benefiting from comparisons with a period immediately before it acquired the rival chain. A spokesman for HMV said the accounting change had been introduced in order to be &quot;more helpful&quot;, but one analyst described it as an &quot;unusual&quot; step.</p><p>Ottakar&#39;s contributed &pound;138.8m of additional sales to the group in the year to 28th April, leaving Waterstone&#39;s with sales of &pound;398.7m, a drop of &pound;20m year-on-year. The results are in line with the <a href="../news/38454-waterstones-sees-sales-worsen.html" title="waterstones-sees-sales-worsen">trading update</a> put out in May, when HMV said that Waterstone&#39;s sales would be down 4.7% (not including Ottakar&#39;s).<br /> <br /> Nevertheless, the positive sales figure is the retailer&#39;s first hint of real growth under managing director Gerry Johnson. Johnson told The Bookseller: &quot;It is still early days but we are pleased with our performance and we should all feel reassured by the improved book market.&quot;<br /> <br /> Fox, who also reported that HMV&#39;s like-for-like sales were up by 8.8%, admitted that the like-for-like comparison was &quot;against softer comparables from a year ago when trading was adversely impacted by the World Cup&quot;. Prior to its purchase by HMV, Ottakar&#39;s was haemorraghing sales, with like-for-like sales down 8% in the sixteen weeks to 20 May 2006.<br /> <br /> Analysts were skeptical about turnaround talk. Nick Bubb from Pali International said: &quot;I think Waterstone&#39;s results are quite poor. The &pound;16.3m operating profit is a disappointing figure - it would have been interesting to see what that profit would have been if they hadn&#39;t bought Ottakar&#39;s. I wouldn&#39;t be shouting about the results representing a turnround.&quot; He said the retailer was &quot;benefiting from better trading conditions of late&quot;, and was &quot;bullish&quot; about the children&#39;s market. &quot;It is an area that a good high street retailer could carve out a niche.&quot;<br /> <br /> Another analyst said Waterstone&#39;s had enjoyed the &quot;bounce&quot; in the high street, and was benefiting from a comparison with an extremely poor period at Ottakar&#39;s one year ago.<br /> <br /> HMV&#39;s share price has dropped back by 2.5pence in trading today.<br /> <br /> </p>