Trade welcomes Daunt's continued leadership after Waterstones sale

Trade welcomes Daunt's continued leadership after Waterstones sale

Publishers, authors and agents have welcomed Waterstones’ change of ownership this morning and expressed relief at the news James Daunt is staying on to lead the company.

The Bookseller understands that new majority shareholder Elliott Advisors plans to grow the business, news which has also pleased the trade.

The chief executives from three leading publishers have welcomed Daunt’s continued tenure as chief executive of the bookselling chain following Russian oligarch Alexander Mamut's sale of his majority stake in the company to hedge fund Elliott, whose European Private Equity arm is run by Paul Best.

David Shelley, chief executive of Hachette UK, said: “I am really pleased about this morning’s news - and especially to hear how supportive the new ownership is of James Daunt and his brilliant team. They have done such an exceptional job over the last seven years at turning the chain around and making it one of the finest bookselling chains in the world. We at Hachette look forward to continuing to work with them under the new ownership as they grow their business further.”

Anthony Forbes Watson, m.d. of Pan Macmillan, echoed his views. “Waterstones has played and will continue to play a vital role in the UK book industry. As long as James Daunt remains in charge I am optimistic about the future of Waterstones,” he said. “Good bookselling, like good publishing, is about people and talent. What James and his team have provided at Waterstones has been transformational. Therefore I am delighted that the new investment and new ownership comes with James at the helm.”

HarperCollins c.e.o. Charlie Redmayne, meanwhile, welcomed the stability the news brought after six months of uncertainty over the chain’s future ownership. "I am delighted that we now have certainty that Waterstones will have the backing it needs to continue to build on the transformational work that was started under James Daunt,” he said. “I am delighted too that James and his senior team will continue to lead and drive the business."

Rob Waddington, sales director for Penguin Random House, added: "Today’s sale announcement is very good news for Waterstones, for the book industry and for readers and book lovers across the UK.  We are delighted to see James remaining as c.e.o. Penguin Random House enjoys a highly collaborative and supportive partnership with Waterstones, which we look forward to continuing under its new owners."

Founded in the US in 1977, Elliott Management is one of the oldest and largest private investment organisations globally, with of approximately $35 billion under management. The fund’s UK arm Elliott Advisors was granted a period of exclusivity to buy the retailer in January, with the deal finally being closed around 6a.m. this morning.

The Bookseller understands Elliott sees a lot of opportunity to grow the business and intends to create more value for shareholders. It is supportive of the work of Daunt and his leadership team, which are all remaining in place at the company, although a new board is likely to be appointed.

Daunt said: “With a change of ownership brings a bit of vigour, a shot of energy. From our perspective the change is a great thing, and we can stop speaking with bankers and concentrate on bookselling.

“I am very pleased for the owner – Alexander Mamut took a huge risk when he bought Waterstones in 2011 and in some way we haven’t lost him, he will continue to be involved in the company, but we have a new majority shareholder and I think that is a very positive thing. It is good to have a domestic owner and they are into books and they have deep pockets.”

Waterstones turned a profit for the first time in five years in 2016 and saw pre-tax profit grow 80% in 2017 to £18m, with Daunt winning plaudits across the trade for refocussing the chain’s emphasis on championing individual titles and reducing costly returns.

Representing writers, the Society of Authors chief executive Nicola Solomon has also welcomed Daunt’s continuance at the chain. “We are delighted that they have a buyer and that James Daunt will remain in charge. Waterstones bookshops have improved immeasurably under his guidance and we hope that the new owners will let him continue the winning formula. We particularly appreciate the facilities given to authors and organisations like ours to use the bookshops for events and activities," she said.

Juliet Mabey, publisher at Oneworld, said she would like to see more investment in the chain under the new owners. “Of course we would all love to see further investment in this important national chain, continuing and enlarging upon the ambitious and very effective reconstruction work undertaken by Lynwood Investments,” she said. “With the increase in print sales, I’m optimistic Elliott Advisors will see plenty of opportunities for developing Waterstones further.”

However, others have been more cautious in welcoming the new owners.

On Twitter Curtis Brown m.d and agent Jonny Geller challenged the firm to set out its growth plans: "Private Equity firm buys majority stake in Waterstones. No mention of future plans or vision so let’s hope it doesn’t mean closing of more bookshops in this country. Waterstones is our only high street chain devoted to selling books-long may it remain so."

Agent Julia Silk of MBA Literary Agents told The Bookseller: “The proof will be how things are in six months time and whether there has been any obvious change. It seems the sale is a positive thing, but whether it is or not will be seen in a few months’ time, not now. If we don't have Waterstones, we're not left with an awful lot. We're left with online retailers, supermarkets, it's a bit grim, particularly for literary fiction, so fingers crossed. We've seen people remain c.e.o. for a few months to keep everything stable so that people don't panic and then not be on board three or six months later. So who knows, we only know what we've been told really.” 

Literary agent Piers Blofeld of Sheil Land Associates added: "It’s a tricky one to judge, on the one hand you fear the new owners will be interested in asset stripping or in Waterstones’ property portfolio… It is hard to know. But the new owners seem to have clear views and an agenda, so if they are going to take Waterstones forward [as a company] than that is very exciting for the UK trade.”