January 10, 2011

British chain Waterstone's under threat


Bookstores across the pond are far from immune to the curse of closures: like the crumbling empire of Borders in the US, there appears to be trouble brewing for major British book chain Waterstone’s, as the HMV Group announced closures of 60 of its stores earlier this week. Last year Borders closed almost all of its UK stores, and Waterstone’s emerged as the last UK chain to survive, but now it looks like their comfortable position is under threat.

In a report from The Bookseller, HMV Group, which took ownership of Waterstone’s in 1998, confirmed the closures would include 20 bookstores, and 40 of the HMV chain. As Britain’s leading retailer of DVDs and CDs, HMV have seen a drop in sales of over 10% in 2010, culminating with a dire Christmas sales performance, partly due to the bad weather in the weeks leading up to Christmas.

On the the other hand, Waterstone’s have performed exceedingly well, taking into account the terrible weather, with profits remaining steady. This has largely been accredited to the drastic store changes implemented early on in 2010, including a switch in MD from the unfortunate Gerry Johnson to the new and shiny Dominic Myers. Myers’ main focus over the last year has been an admirable shift from supermarket-style heavy discounting, towards a more local approach, with each store capitalising on the knowledge and passions of its dedicated Booksellers. Speaking to The Bookseller concerning potential store closures, Myers commented,

“Obviously the group performance makes it clear that we need to deliver an improved cost performance, and a number of Waterstone’s stores will close as part of that.”

There has been further speculation over at The Guardian as to whether HMV Group will consider selling Waterstone’s in order to pay off its massive debts, perhaps even back to Tim Waterstone, who attempted to buy back his namesake business in 2006.

Whatever happens, the future of Britian’s last remaining chain bookstore is still precarious. Maybe now it’s time for the British indie to rise up and take power?