November 25, 2015
Waterstones turning a profit, and Daunt’s plan seems to be working
by Zeljka Marosevic
Waterstones is set to make a profit for the first time in five years—that is, if the chain continues to do well over Christmas. Waterstones’ managing director, James Daunt, told The Bookseller that after a particularly strong start to the year, the company was moving into the black:
Over the next few weeks we will know if we make a profit for the current year we are in, but that is certainly what we are looking to do. Should the market hold up the way it has been doing then we will, but we are entering the most important six weeks of the year and it is all to play for. If it all goes well we will be in the black and I hope it does all go well.
It’s extraordinarily good news considering the state of the chain in 2011 when Daunt took over. Facing huge annual losses, Daunt banished Waterstones’ famous “3 for 2” offer, stopped the practice of selling display space to publishers, and—the move that hurt the most—made massive redundancies in staff by cutting half of the number of managers and losing a third of employees on the shop floor (we wrote about those staff losses here).
But Daunt also attributes the improvement of Waterstones’ fortunes to the revival of the physical book (the burst of the ebook bubble). He told The Guardian:
I always believed there would be a natural point of equilibrium with digital reading – that it would overshoot, then come back and settle down. That made intuitive sense, and that indeed has happened…
If you go on a plane or a train on holiday, you will see many more people reading a physical book rather than digital. It is a very different experience [reading an ebook]. You don’t remember it as well. I know it’s not just me. You don’t have the physical relationship. You don’t know where you are in a book. It may say 62% but it doesn’t mean the same thing. You can’t remember what it’s called because you haven’t had the cover.
Among the books that did well for the retailer this year, he singled out Harper Lee’s Go Set a Watchman, which was a “massive, massive thing” for Waterstones, and other bookstores. Looking ahead to Christmas, he told The Bookseller:
We had a very, very good start to the year as you know so we are lining up for what we hope will be a very good Christmas. The books are good enough, but there are no surprise hits taking off at the moment, no easy wins.
Zeljka Marosevic is the former managing director of Melville House UK.