Waterstones set to woo children
and no, he says, he didn’t call new partner Amazon the devil
WATERSTONES managing director James Daunt plans to revisit strategies employed by its old adversary Ottakar’s by appealing more to children.
He intends to add more children’s books and games, and is even considering selling educational toys in his latest efforts to reorganise the business.
The new initiative is reminiscent of the strategy used by its former competitor Ottakar’s, which it acquired six years ago and focused heavily on children’s books.
Daunt said: ‘Waterstones appeals to everyone from when you first reach out of your buggy to the end of your life.’
He also plans to add about 60 coffee shops to the 294-store chain. Daunt said the company had been underinvested and had lost touch with customers. The fruits of his initial changes would not be tested properly until Christmas.
Waterstones managing director James Daunt faces some hellish decisions, though he denies describing his new partner, the mighty online retailer Amazon, as ‘the devil’.
But there is no doubt though that he is playing with fire with last week’s announcement that he will allow Amazon to sell its Kindle e-reader through Waterstones book stores.
He admits the decision had brought some ‘embarrassment’ but insists it makes commercial sense. ‘I just don’t get this idea that we have sold ourselves to Amazon,’ he says.
‘We need to keep these shops in a relevant place for people that like to read books. I am simply asking what do my customers want and I don’t want to exclude people from my shops just because they like to download books from the internet,’ he says.
As for that ‘devil’ jibe: ‘It’s just not the sort of thing I would say.’
But he admits to being aware of criticisms of letting the ‘fox into the coop and all of that’ and expects to have to defend himself at the Hay Festival of Literature & Arts, which begins on Thursday.
Daunt’s plan relies on making sure book readers are kept aware of the chain, which was bought 11 months ago by Russian billionaire Alexander Mamut.
Daunt has started to spruce up stores, reduce stock held unnecessarily – which can amount to tens of thousands of pounds in some shops – and tailor the books on offer to local markets. Even two shops in the same town or city could offer substantially different titles.
The company has earmarked 101 stores to get a makeover by the end of summer as part of an investment of ‘tens of millions’. Plans include basics such as removing low polystyrene ceilings and redecorating stores that have not been touched for a decade.
‘This business was not a well-oiled Mercedes when we inherited it. It was a spluttering Lada,’ he says. One store in Glasgow still has decor recognisable from its days with Dillons, which was officially absorbed into Waterstones in 1998 after both businesses had been acquired by HMV. ‘Too many of our shops do not look great,’ admits Daunt.
HMV was forced to sell Waterstones to Mamut to raise money and cut its own debt. Daunt, 48, who is married with two daughters and has six Daunt Books shops in London, has been a bookseller for 21 years and was brought in by Mamut to turn Waterstones round.
But Daunt emphasises that buying the chain was ‘not a vanity project’ for the Russian tycoon. ‘This is not a Chelsea Football Club. We are owned by someone who is highly motivated to keep Waterstones on our High Streets,’ he says.
Daunt will take full control of the Waterstones website at the end of June, when the split from HMV will be complete.
That will allow him to relaunch the internet business next year and introduce plans such as ‘click and collect,’ the new favourite strategy of retailers that allows customers to order online while also bringing them into stores.
But he says one of the big changes is to stop managers worrying about competition from supermarkets and Amazon. ‘There was a sense that we were on the back foot with Amazon. We almost couldn’t talk about them because they were considered to be too terrifying,’ he says.
‘They are a formidable competitor and they have changed our industry beyond belief. But they are not that much cheaper than us, we discount too. What we do provide is a different experience,’ he says.
Changes are beginning to be felt. Sales in April ‘were up for the first time in living memory,’ he says.
But though the good shops are doing a lot better, he admits the ‘struggling ones are still struggling’ and that some managers have greeted the new broom with more enthusiasm than others.
The future will be clearer after Christmas when the benefit of changes will be more apparent. But the key, he insists, is connecting with local customers.
‘The worst retailers are the iden- tikit ones that are the same on every High Street. There is a lot we can do to improve the appeal of stores – more children’s books, games, educational toys, magazines, stationery. But please, do not put the same books into Hereford as you do into Romford,’ he says.
‘I’m simply asking – what do our customers want? If I can make that work, the personal embarrassment of having to stand up and sing the praises of Amazon is a small price to pay.’