Waterstones m.d. James Daunt said the company’s plan for recovery was “on track” after its losses more than halved in 2013.
The most recent set of annual results showed sales at Waterstones were down by 2.9% to £398.5m in the 12 months to April 2013. The decline was much shallower than the 11.1% drop in revenue reported over the same period a year earlier. The chain also more than halved its operating losses in that time, from £25.4m to £12.2m, before exceptional costs. However, exceptional costs—including £2.1m in store closures, £1.4m in restructure and £2m in non-cash asset write-downs—meant Waterstones’ total loss for the year was £23m—down from £42.9m a year earlier.
The accounts also revealed stock at year end at Waterstones dropped 16% to £66m, down from £78.4m a year earlier. The company invested heavily in refurbishing stores during the period, and its capital expenditure was £29.5m, with the company vowing to show the same level of investment this year.
Daunt told The Bookseller “the plan was working” but said it needed to “continue to work”. He said: “We put together a plan three years ago and we think we have delivered pretty much to the plan. These results are clearly a step forward but we have much more to do.” Daunt said that while the company was on track to become cash-rich, its progress had not been achieved in the way he expected. “If you had told me three years ago that I would be selling Kindles in Waterstones stores, for example, I would not have believed you,” he said.
“We have changed the way we buy books and that takes a while to bed in, and it also takes a while to learn how to do it well. The buying team have got better and they continue to get better,” Daunt said. Book returns have continued to drop, resulting in substantial savings, and sales had grown in shops with Café Ws. “The bookshops have got much more interesting and that is because booksellers are spending much more time on the shop floor instead of in the back office,” he said.
A year ago Daunt said it would take two years to turn Waterstones around. “My sole focus is making enough cash to reinvest in the business and we are making cash, proper cash, at last. I think the core book business is looking pretty solid,” Daunt said. The company increased its cash by £5m, after generating £35.2m from its operating activities and investing.