Waterstones’ new owner cuts full-year losses
HIGH street bookseller Waterstones has narrowed its losses by more than a third in its first financial year since being snapped up by Russian billionaire Alexander Mamut.
Accounts filed last week on Companies House show that pre-tax losses fell to £23m in the year to 27 April from £37.3m the previous year.
This includes £5.4m of exceptional costs from closing eight of its stores, property write-downs, redundancies and other restructuring costs.
Mamut’s firm A&NN Capital Management bought Waterstones in 2011 for £53m from HMV and hired James Daunt, the founder of the eponymous books chain, to turn the business around.
The retailer has been tackling rising competition from online players such as Amazon and falling demand for physical books by introducing other merchandise into its stores as well as coffee shops known as Cafe W.
It has also tried to embrace the shift towards digital reading by striking a deal with its rival Amazon in May 2012 to sell its Kindle ereaders, setting aside earlier criticisms of Amazon as a “ruthless money-making devil”.
Waterstones said it invested £29.5m last year in “reinvigorating the shops, such as they are places where people who are interested in books can go to browse, that encourage new readers to expand horizons”.
The group said this investment was part-funded by working capital efficiency, with inventory levels slashed by £12.4m and that “margins and operating costs have been efficiently managed across the business”.
Total sales across its 276 shops fell 2.9 per cent to £398.5m in the year to 27 April compared with the previous year. However this was an improvement on the 14 per cent sales decline reported in the previous year.
Daunt has said underlying sales over Christmas were down slightly on the previous year after being hit by storms on what is usually the book chain’s busiest day on 23 December.