Sales at bookseller Foyles rose by 2.2% to £23.4m last year, but the family-owned company slipped into the red as it moved into a new flagship store and prepared to close two smaller outlets.
The independent bookseller said its move to the former Central Saint Martins art school building on Charing Cross Road, central London, just a few steps from its home for the previous 85 years, resulted in an operating loss of £600,000 in the year to June 2014, compared with a £100,000 profit a year before.
Sam Husain, its chief executive who hands over the reins to former Hamleys executive Paul Currie when he retires on Monday, said: “It was a bit of a clean up year, the move was quite costly and we wrote off assets at White City which we closed last year.”
In a year of moves, Foyles opened a new outlet in London’s Waterloo station in late 2013 but closed another a few miles north at St Pancras station last summer .
Husain said the sleek new flagship store, which opened in June, was now trading well and was attracting new, younger shoppers.
“December last year was exceptionally good. I’m sure we are taking market share in physical books from other channels, perhaps the supermarkets.
“We have got incredible confidence in the business because the shops are doing so well. The store at Waterloo station is absolutely thriving and the new flagship is also beating all our expectations.”
The Foyle family ploughed an additional £2m into the business in 2013 via a rights issue. Christopher Foyle, the chair who owns two-thirds of the 112-year-old company, has invested more as he wants to make its stores into a magnet for booklovers with the kind of experience that draws shoppers to shops such as Harrods, Fortnum & Mason or Hamleys.
Husain said Foyles’ plan was working as sales continued to increase, despite industry figures showing a decline in the sale of physical books as readers turn to digital alternatives.
“People want to be able to visit good bookshops, to discover books and enjoy browsing,” he said.
Underlying sales at the business founded by brothers William and Gilbert Foyle, rose 8.1% in December as its new flagship store helped draw in more shoppers.
Bigger rival Waterstones also enjoyed a decent Christmas as it reported an increase in the sale of physical book. But the retailer, which is owned by Russian businessman Alexander Mamut, made a £3.8m loss in the year to 26 April as sales fell 5.9% to £390m as it closed some stores.
Currie has said he wants to build Foyles’ online business to extend its geographic reach well beyond London. The group has only one of its five stores outside the capital – in Bristol – but will open an outlet in Birmingham this autumn.
