Nathan's blog

July 05, 2011

Some Inconvenient Truths

This week will be the first full week that Waterstone’s spends under new ownership. Russian billionaire Alexander Mamut has bought the company for £53m from HMV and has installed James Daunt to run the whole shebang.

Daunt is much admired in the book world for setting up the small but successful chain of independent bookshops that bear his name. And they are splendid shops. I used to live near the one on Marylebone High Street and it was a regular haunt of mine. Lovely atmosphere, friendly and knowledgable staff and a fine selection of books, none of which are discounted. Quite an achievement to make that work in the current economic climate.

Although it is worth pointing out that the shops tend to be located in rather affluent areas of London and the recession may not be biting quite as hard in Chelsea and Hampstead as it is in Bury and Basildon.

Nonetheless, he is a very successful bookseller and his surprise appointment has been received positively by pretty much everyone in the publishing industry. A healthy Waterstone’s is vital to that industry and everyone will be wishing him every success. Not that we will necessarily know how he is doing. Now that Waterstone’s is in private ownership there is no obligation to announce results. It will be interesting to see whether they do or not.

But the goodwill is certainly there with messages of support from many of the high flyers in the book world and very positive coverage in the media. Some have gone even further, taking the opportunity to lay in to the previous management. I saw some fascinating tweets from a recent publishing conference in which leading publishers and agents were tearing the HMV-backed administration to shreds with soundbites along the lines of ‘finally Waterstone’s is in the hands of someone who understands books’ and ‘the last 10 years at Waterstone’s have been disastrous for publishing’ and other such gems.

Which brings me to the subject of this blog post, the inconvenient truths that no one seems prepared to mention. I must declare an interest here. While I have had nothing to do with Waterstone’s for the past 5 years or more – I left shortly after the much maligned Gerry Johnson joined, partly because I didn’t think his plans would work – I was there for 6 years as buying manager before that and did get a lot of stick for the changes I helped to implement. So my view is undoubtedly biased. Nonetheless, there are a few things I think are worth pointing out:

• Waterstone’s had its most successful years ever under HMV ownership, both in terms of sales and profit. And that wasn’t just one year in isolation, it happened several years in a row. 

• Some of the individuals who have been vocally critical of the HMV years will have made a hell of a lot of money in bonuses during that period and a decent chunk of their success will have been down to the sheer volume of the books they published or agented that Waterstone’s sold during that time.

• When you criticise the Waterstone’s of recent years you are, directly or indirectly, criticising a hell of a lot of people who are still working there. Only about three or four individuals have actually left the business, everyone else is the same.

• The 3 for 2 campaign, which gets such a bashing from the literati, is hugely popular with readers and customers. I have no doubt that it needs to evolve and can be improved but if you take that away you are going to lose a hell of a lot of sales. No one is suggesting that Waterstone’s will do that but many commentators use the campaign as lazy shorthand for the ills of the business.

• Neither will the company be saved by a sudden move to non-discounted books. Every few years or so Waterstone’s has experimented with a reduction in discounting. Every time this has happened it has led to a reduction in sales, profit and market share.

So there you go. Just a few inconvenient truths that I am not reading anywhere else but are worth mentioning. Much as some would have you believe that HMV’s ownership of Waterstone’s was a calamity, the truth is not quite so simple, or negative. It wasn’t a period where everything was perfect, far from it, but it was not quite the disaster it is being painted to be.

I am not offering solutions here – I am neither qualified to do so, nor do I think anyone would welcome it – I am merely pointing out stuff that I think some people have forgotten, especially if recent articles, speeches and comments are anything to go by.

Something we can all agree on is that we want to see Waterstone’s remain on the high street. Whatever your feelings about how they have been run or what they do, they play an important role and we are much better off with them than without them. Thousands of passionate and knowledgable booksellers work in their shops and sell millions of books to the many readers of this nation. If the new owners and managers can help them to do this even better than they already do then everyone will be happy.

I wish them all the very best of luck.

Posted at 06:00 AM in The Book World | Permalink

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Good on you, Mr Pack.

As a one-time category manager for the national bookselling chain in Canada I know what it means to have the organization I worked for caricatured in the media and among industry chatterboxes: in my case it was portrayed as a one-woman operation where everyone contributed nothing but fealty to top brass. Even at our most successful (ie. when we were sending the biggest cheques to publishers) you’d have been hard-pressed to find anyone outside the the organization saying that maybe these guys know a thing or two about how to manage this business and maybe the industry is better off with us than without us.