Retail Week, today
Posts Tagged ‘Waterstones’
Waterstone’s had a shocking Christmas and MD Gerry Johnson has paid the price and has left the business today.
It’s a move which will have the precious souls who work in the company’s stores celebrating in the aisles, as Johnson had become unpopular within the business, and parent company HMV’s chief executive Simon Fox has done the right thing - he probably should have done it six months earlier.
Personally I liked Gerry, although my view is probably clouded by the fact that he was a big cricket fan. The last time I had a proper chat with him was on the top deck of a 36 bus, where I’d bumped into him heading to the Oval for the Ashes decider last Summer.
He was never popular with the booksellers in his stores, but there was a bit of snobbery about that as his background - he came from Booker cash and carry - was as far removed from bookselling as you could imagine.
However, in recent months he’d started behaving a bit oddly, the clearest evidence of which was banning access to the Bookseller’s website for the company’s staff, which looked like a petty move. The disastrous launch of The Hub, the company’s new distribution centre, which compounded very weak sales trends, meant that Fox had no option but to make a change.
So what does his successor Dominic Myers do? Well, he doesn’t have to look far for inspiration, because many of the issues Waterstone’s faces affected HMV too. Fox has been very clever in reinventing HMV as a chain which is at the heart of entertainment in its broadest sense, with events in store, range extensions and tie ups with live venues.
Waterstone’s, in contrast, has lost what makes it distinctive, churning out best-sellers in a way which doesn’t give it a point of difference from either WHSmith on one hand or Amazon on the other. Giving it back a personality and re-establishing it as the place for book buying on the high street will be Myers’ biggest task, alongside sorting out the Hub.
The fact that he’s internal will be perceived by some as insufficiently radical, but means he has experience of HMV’s transformation and will be able to hit the ground running.
Some people are taking the disastrous sales figures as indicating the demise of high street bookselling. I hope and believe that’s wrong. E-readers notwithstanding, shoppers have far greater affinity with physical books than with physical CDs and DVDs, yet Fox has managed to reinvent HMV and give it a future at least into the medium term. Waterstone’s should, if anything, be an easier task.
Well the office is deserted this morning, but to be honest Oxford Street wasn’t much busier when I was down there earlier on. Admittedly it was about 10-ish so pretty early in the day, but I was surprised there weren’t more last minute Christmas shoppers out, particularly as many people will have had their plans disrupted earlier in the week by the weather.
Anyway it meant I could polish off my last few bits of gift shopping pretty straightforwardly and then head into the office. I’d been on the BBC earlier talking about Christmas sales, but the media interest in the sector is nothing like it was last Christmas Eve, when I vividly recall my last-minute panic shopping in Leadenhall Market being thrown into chaos by the collapse of Zavvi.
My saviour this morning was its former rival HMV, the last man standing in the entertainment sector, and it was a really pleasurable experience with loads of helpful and friendly staff on hand. Simon Fox has got that business in great shape and although his hand was forced by another suitor, his deal to buy live venues business Mama yesterday was yet another sign that he is building for the future so that HMV dominates the entertainment space beyond pure retailing.
HMV has done well out of the failure of its competitors, as will sister chain Waterstones from Borders collapse, but many in the industry have real doubts about its long-term future because of the structural change going on in how people buy and consume entertainment. I was speaking to someone a bit younger than me just the other day who loves music but said she hadn’t bought a CD in years, and I suspect many younger people are the same.
While I have no favouritism towards any retailer I think it would be tragic if this change meant entertainment and indeed book retailing disappeared from the high street, not just for HMV itself but for retailing generally, as a diverse range of businesses is vital to the health of the high street. Let’s hope Fox’s diversification of HMV can really give it a sustainable future - the jury’s still out but the fact he turned down the top job at ITV to stay put shows he believes the job can be done.
I’m off now to get wrapping but we’ll be publishing online between Christmas and New Year. Whether you’re in store or head office, I hope your Christmas numbers are everything you wished for, and that you’re able to enjoy a peaceful and relaxed Christmas.
Apologies for not blogging yesterday, crazy day as we gear up to the subs barrier launching tomorrow, which is also the shortlisting day for the RW Awards. Today’s pretty hectic too - I’m out this afternoon with River Island CEO Richard Bradbury, seeing his new HQ in the rather unglamorous Hanger Lane, and this morning I was at the Ivy for the third in the series of retailer breakfasts in aid of the Textile Industry Children’s Trust.
I’ve always liked TICT chairman David Carter-Johnson, best known until recently for being CEO of Adams, and I like him even more since he introduced me as the “ever-suave” editor of Retail Week this morning. I have a stinking cold today and actually feel anything but suave but the thought was nice. We were talking about private equity with Debenhams chairman and serial dealmaker John Lovering, and Peacocks very likeable boss Richard Kirk, and had a really good discussion.
As always it was all off-record but there was a healthy debate about the merits of private equity, and about the potential for exits next year. Lots of PE-backed retailers, led by New Look and Pets at Home, are gearing up to float next year, but while they should succeed as long as consumer spending holds up, it may be that the valuations managements attach to some retailers turn out to be ambitious when they come to exit.
I was going to post yesterday on this article from the Guardian about Waterstones from Tuesday. I have to be a bit careful seeing as we’re half-owned by the Guardian but I’m no fan of the liberal hypocrisy on which it is built - it always amused me that its leading leftie columnist sent her daughter to the same private school in south London as me. Do as I say, not as I do. The Waterstones assualt is the worst example I’ve seen to date of the book world not realising that book retailers operate in the real world.
The fact is that Waterstones is the last show in town. The Guardian may well sneer - as it did in a picture used to illustrate the print version of the feature - at the sight of loads of shoppers at Lakeside queueing up to get a signed copy of Katie Price’s book, but that’s what Lakeside book shoppers want to buy. That Waterstones retains any presence as a serious high street bookseller is an achievement in iteself - look what’s happening to Borders - and if the book world had any sense they’d get behind it. Otherwise WH Smith, Amazon and Tesco will get the mass market on a plate, and speciality bookselling on the high street will die.
You bump into retailers in all sorts of places, but one place I’d never seen one was on the bus. But there I was on Saturday morning catching the number 36 home and I saw Gerry Johnson, the very amiable chief executive of Waterstones. He was off to the Oval to watch day 3 of the test, I was due to be going the next day - think I probably had the better deal!
Funnily enough I’d been sitting next to Gerry’s retail director, a very nice lady and former Retail Week Rising Star Awards winner called Cheryl Owen, at the Oxford Summer School the night before. Waterstones has lagged behind the recovery of sister company HMV, but has been quite rightly preoccupied with getting its desperately needed new supply chain hub into place. Once that’s sorted out, I think it will start motoring again.
Poor old Gerry gets a lot of stick from the notoriously sensitive people who run bookshops - read the comments on Sainsbury’s below this story on the Bookseller’s site for a brilliant summary of how they think - but someone has to do the job of dragging their mentality into the 21st century, otherwise they’ll end up like Borders.
Ahead of seeing England’s magical Ashes win at the Oval on Sunday - am trying to think of a retail connection but I can’t - I was lucky enough to be at the V Festival on Saturday, in Virgin Media’s amazing Louder Lounge. Seeing Myleene Klass there just being remarkably nice to everyone reminded me what a brilliant asset she is to M&S and Mothercare, the sort of ambassador any retail brand would like.
My favourite act was Lily Allen. A bit lightweight maybe but perfect for a Summer’s day and she’s obsessed with cricket, which is a rare but excellent trait in a woman. Moreover, she managed to get the words Tesco and alfresco to rhyme in one of her songs, which is the first example of a retailer being used in a hit single I can think of since Sainsbury’s featured in Rabbit by Chas and Dave. Unless anyone else can think of any others?
With all the focus having been on Allied Carpets over the past week events at Borders - where management has bought back the business from Luke Johnson, backed by Hilco offshoot Valco - have been neglected.
While the move gives some more certainty about the struggling company’s future in the immediate-term, past form suggests that businesses where Hilco becomes involved more often than not don’t have a long term future. Valco is Hilco’s private equity arm, which suggests the aim here might be more about running the business for the medium term than a quick sale or closure, but I’m not over-confident.
I’m not surprised Borders has struggled though. Books is a tough market for everyone and Borders hasn’t helped itself with its odd choice of locations. I know books work on retail parks in the US but in this country it hasn’t really hapenned, particularly when the parks you choose are ones like Gallions Reach in East London - a less promising location for a bookstore is hard to imagine. It was also very slow into the online game, and has - as seems common for booksellers - struggled with its supply chain, siting a big warehouse in the unlikely location of Cornwall, nowhere near anything, only to close it again.
I’ve always resented Borders for its neglect of Books etc, which was a really good London focussed book chain, and still - despite Borders best efforts to offload the stores down the years - still offers an intelligent yet mass-market proposition for the metropolitan book buyer, although the terrific branch near the old Retail Week office in Clerkenwell is now very sadly gone.
I will also be sorry to see the Borders Oxford Street flagship go. New Look is taking the store on. It always seemed busy to me, but unfortunately more with people using at as a library than buying - I myself have been guilty on many occasions of using it as somewhere to keep warm between meetings in the West End.
But with its departure and that of the Waterstones at the Tottenham Court Road end, Oxford Street, like so many high streets up and down the country, is becoming a book free zone - a sad state of affairs for the vitality of our shopping streets.