‘Publishers live in marble palaces’
Are books in crisis? As Waterstones is sold, its MD, James Daunt, tells Jake Kerridge that the prophecies of gloom are wrong
James Daunt has mastered the busy bookseller’s art of walking across the shop floor as quickly as possible without bumping into the customers who veer into his path, too distracted by the rich pickings on the shelves to watch where they’re going. As he heads towards me in the Piccadilly branch of Waterstones, I wonder if any of them realise that it’s thanks to the man striding purposefully among them that this shop still exists.
When HMV sold the Waterstones book chain to the Russian businessman Alexander Mamut in 2011, the company was hurtling towards the knacker’s yard. But Mamut made an inspired decision when he appointed Daunt as his managing director. The 54-year-old, the founder of the small but muchadmired independent chain Daunt Books, has transformed the company, brought it back into the black, and defied predictions that the mighty Amazon was going to stomp bricksand-mortar bookshops into oblivion.
Now, though, the much-loved book chain faces another threat to its existence – from a ruthless hedge fund. Elliott Management, owned by the controversial New York billionaire Paul Singer, announced at the end of last month that it was buying the company from Mamut, sparking fears of asset stripping. Anne Stevens, CEO of British engineering firm GKN (in which Elliott has a stake) has complained that Elliott does not “give a crap” about long-term outcomes, and Singer himself was once described as a “financial terrorist” by the president of Argentina for his ruthless pursuit of debts.
“Private equity firm buys majority stake in Waterstones,” tweeted literary agent Jonny Geller when the sale (for a rumoured £250million) was revealed. “No mention of future plans or vision so let’s hope it doesn’t mean closing of more bookshops in this country.”
Daunt is staying in his job, and as we talk over very decent coffee in the Piccadilly shop’s mezzanine café, I remind him that, at the time he was hired in 2011, he claimed to be very pleased that Waterstones had been bought by “one man writing a cheque” rather than a private equity firm. How does he feel, now that alternative outcome has come to pass?
“I’m genuinely extremely pleased to have worked under Mamut,” he begins. “[He] took the most extraordinary risk in allowing us to respond to that explosion in Kindle- and e-reading that took place in 2011-12. To hold his nerve and not bail out … I think delivering him a profit on his investment was a duty, frankly. So who was it best to sell to? Well I’m afraid these days, private equity, in a very tough retail market, is probably the answer.”
What does he think about prophecies of gloom like Geller’s?
“That’s slightly illogical,” he says. “We’re opening more shops than we’re closing. Some people have this notion that we’re always about to close shops – if we close one we must be going to close a hundred – which I simply don’t understand.” There has been no grand announcement of future plans from Elliott, and Daunt insists this is because they do not want major changes.
“I obviously have asked them why they’re buying us and what they expect, and the answer has been: ‘Carry on as you’re doing. We think that you can grow, and if you do grow, we’ll sell you for a profit’.”
What Daunt has been doing has certainly been successful. Waterstones stores have become nicer places to visit, with more flowers and comfy furniture. He insists that staff make their own decisions about how their branches are run; every shop has a different customer demographic, so all key decisions – what books to stock, pricing structure, layout – have been left to branch managers. At the same time, readers have fallen back in love with physical books, something Daunt believes has to do with the power of the book as a decorative item.
“Bookshelves, for those who are lucky enough to be able to afford to invest in books, are a beautiful thing to own, a necessary part of the way that we decorate our homes,” he says. “I don’t think they’ll disappear, just as the picture in a frame hanging on a wall is not going to disappear and turn into an LED plasma screen. That’s not to say that Kindles aren’t an essential way to read in some circumstances, but they’re really substantially worse in an awful lot of ways.”
At the beginning of this year, Waterstones announced an 80per cent jump in its annual profits.
So what are Daunt’s plans for the future? “It’s a very uncomplicated vision: carry on doing what we do best,” he replies. “We’ll open new shops, we’ll smarten up ever more of our existing shops. The interesting point is that the very difficulties that are going on in the high street at the moment are an opportunity for us. For example, in the last three weeks we’ve opened shops in Clifton [in Bristol], Reigate and the Trafford centre [in Manchester], and they’re all very different places. As a lot of bank branches and shops close, we can open shops at last: I’ve been wanting to open a bookshop in Clifton since the Nineties.”
I ask him if he is bothered by reports of a crisis in “literary” fiction, with sales reportedly plummeting.
“I’ve been nearly 30 years a bookseller and I don’t think I’ve ever heard anything different,” he says. “We sell astonishing numbers of whatever the latest literary bestseller is, and our bestselling book almost every year is a
‘My parents were convinced that the television was going to be the end of reading’
novel, and a literary novel at that. Publishers wring their hands and say woe is us and the end of the world is nigh. Nonetheless, when I started as a bookseller they were all in small buildings with rickety staircases. Now they’re in marble palaces along the Thames. I shouldn’t mock, but they really aren’t doing badly.”
He is sanguine about the threat to reading posed by competing forms of entertainment, be it Netflix or social media. “Any parent, of which I’m one, who watches their children flick between a million things, thinks: are they going to sit down and read? But then I just think back to my childhood, and my parents were convinced that television was going to be the end of reading. I’m not so worried because books do provide astonishingly good entertainment.”
Daunt doesn’t use social media and hardly watches television. Instead he spends his leisure hours enjoying what he needs to do for work: read.
After talking to him I have a quick look around and end up so beguiled I spend too much money and am late for my next appointment. Millions of people have the same experience in Waterstones branches across the country. Will that still be the case if and when Daunt leaves the helm?