Waterstones, Britain’s largest bookshop chain, saw sales at its 176 stores fall 5.9% to £390m last year although it managed to reduce losses.
The company, which was sold by HMV to Russian businessman Alexander Mamut in 2011, has had more than £50m invested in it over the past two years. The company said this investment “combined with better standards of bookselling within the shops to improve service and the range of books stocked, is once again making Waterstones, for those who love books, a place to visit and spend time”.
Despite the decline in sales, the group’s underlying operating loss for the year to April 26 2014 narrowed to £3.8m. It had been £12.5m for the previous year.
At a pretax level, Waterstones’ losses also narrowed – from £25.8m to £18.8m – but were hit by one-off store closure and restructuring costs of £6.9m, as well as £9m of financing costs, largely owed to Mamut’s Cyprus-based ownership vehicle.
The latest accounts reveal new financing arrangements have been put into place, which mean Waterstones owes £133m to its parent, Mamut’s A&NN Group. The accounts state that interest will be charged on this sum at 7% or above until 2021, when the money is due to be repaid.
After acquiring Waterstones for £53.5m in 2011, Mamut hired veteran bookseller James Daunt to run the business. The company recently said physical book sales at the stores rose 5% in December, and Daunt has plans to open at least a dozen new shops in 2015.
Thanks to strong Christmas trading, Daunt said the group was “heading towards break-even” in the current financial year.
