Waterstones boss: Bookshops are back
Think young people are looking at Snapchat instead of reading? Wrong! Waterstones’ boss says they have helped open a new chapter for high streets in...
IT WAS a traditional retailer facing ruin after losing custom to more nimble competitors. Predicted to collapse like Woolworths and BHS, book chain Waterstones has been saved by a very old-fashioned revival that offers a glimmer of hope for high streets everywhere.
About to deliver a second year of profit, chief executive James Daunt is now thinking the unthinkable. Can he bring bookshops back to districts they have disappeared from as Britain falls in love with browsing for paperbacks once again?
The book enthusiast thinks there are 60 locations around the country that should have shops but do not.
‘It’s a reflection of the appalling casualties there have been in the independent sector in particular,’ he says. His plan is for Waterstones to fill the gap. It would mark a big expansion of his 270-strong chain, but he admits it will take years to achieve. ‘There just aren’t that many retail units available, so it is an aspiration.’
Still, the fact he is thinking about it suggests Waterstones is here to stay. Only a few years ago, so-called retail experts were writing the last chapter of its own story after Amazon tore into sales. That was until it was bought for £53million by Russian billionaire Alexander Mamut, who hired Daunt in 2011 and tasked him with saving the chain.
Waterstones seems relaxed that he still owns his eponymous book store chain. At his new company he went straight back to basics, installing comfy furniture, pyramid tables and flowers. As we take tea on the balcony of the flagship store on London’s Piccadilly, Daunt, 53, gazes on the shoppers below. ‘I have been resolutely old-fashioned about it. We needed better shops.’
That meant re-energising his army of booksellers, even though he had to axe 200 of them to make ends meet. ‘They needed to want to change their shops. Would they start to enjoy being booksellers again? I knew if they did we would make a success of it.’
Much has gone on behind the scenes: new till systems, reducing costly returns and handing individual bookshops responsibility for ordering, sales and even pricing.
Such autonomy and the in-store enthusiasm that comes with it helped to make The Essex Serpent, a gothic Victorian novel by Sarah Perry, a surprise hit last year. This summer, Daunt has high hopes for The Sixteen Trees Of The Somme by Lars Mytting, which has been translated from Norwegian.
He has kept publishers on side even though he turned his back on £27million of income early on by ending the practice of selling space in windows to the highest bidder. ‘We have good relations with them. One reason is that I am clearly a book person. I speak their language and know them extremely well.’
One of his biggest investments was lighting. A significant part of his annual £6million store refurbishment programme has gone on LED fixtures, which are ‘blinking expensive’ but banished the old gloominess without energy use going through the roof.
Touches such as these helped lift sales even when branches moved premises. Take the new Wimbledon store in South West London. ‘It is much smaller [than the old one], it is not in as good a position and the rent is much, much lower. And it is selling slightly more books.’
It helps that the market is buoyant, even though there is nothing new from Harry Potter author JK Rowling this year to flood shops with her fans. ‘We have definitely got nice, not dramatic, but decent growth in physical book sales,’ he says. The simple beauty of a book has won back some Kindle converts. But a bigger impact on sales has been social media sensations turning to traditional publishing, including healthy eating guru Joe Wicks.
The young adult section, where authors include Malorie Blackman and Patrick Ness, is grabbing more shelf space and has grown even in the years when e-readers devastated other categories. Daunt is enthused. ‘They are the readers of the future. These are the people who are not meant to be reading, they are all meant to be on Snapchat.’
And what about online retailers? Amazon, with its deep discounts, convenience and super-quick delivery, barely crops up as we talk. ‘I am utterly relaxed about it,’ he says. ‘I think that is because of where I come from. As an independent bookseller you coexist alongside these giant chains Waterstones and Borders. We’ll coexist with Amazon in the same way.’
But he is not complacent. Waterstones returned to the black with a £10.9million profit in the year to April 2016 and Daunt expects the year just finished will be ‘as good as’ the last. He is not satisfied and would like to double profitability to give the company a bigger buffer.
‘If you are a prudent and responsible person running a company you would get yourself into shape to weather whatever circumstance throws at you.’ He might as well be referring to Brexit, which he warned staff last year could herald a significant retail downturn. Daunt fears the longer term implications of high-value jobs leaving the UK.
Meanwhile, Waterstones might change ownership again. Mamut, who has stumped up about £100million to save it, ‘said his ambition is to put it back into a more British ownership, whether that is a stock market listing or some other form of placement of a stake. I think he likes being associated with us, but I don’t think he is wedded to owning Waterstones in its entirety.’
The mild-mannered Daunt reserves his anger for two subjects. The first is business rates. ‘I think the high street, particularly outside the large metropolitan areas, is such an important part of the fabric of communities,’ he says. ‘It offers good quality jobs where people need to live. But I know high streets which are just traumatised and the rates burden is a massive impediment to keeping shops open. That is a tragedy.’
His second concern is the state of public libraries, which he claims operate alongside bookshops to boost children’s literacy. About £25million was cut from library budgets last year, and another 121 libraries were closed. ‘It is a catastrophe. Libraries are hugely important and recreating them will never happen. The amount of money that has been saved is minuscule.’
Daunt’s love of books goes back to a weekly visit as a child to his local North London library with his mother. His father was a diplomat so they travelled – New York, Paris, Brussels, Cyprus. After university at Cambridge, he worked as an investment banker at JPMorgan, but found the work ‘utterly boring’. Years before bankers fell from grace, his wife didn’t think much of the profession either.
So at 25 he quit to follow his dream, taking a big loan to buy for £240,000 a beautiful bookshop on Marylebone High Street in Central London. It was a huge gamble, but the Daunt Books chain has grown to six shops in the capital, where titles are still arranged by country. He still goes in to visit the staff.
‘It is extremely rude for them not to at least pretend that they’ve missed me.’
As he reflects on his success so far at Waterstones, there is only one book-shaped black cloud on the horizon: he has run out of space at his Hampstead home for his vast private collection.
Encouraged by his wife Katy, Daunt has introduced a ‘one in, one out’ book policy. The father of two daughters sighs. ‘I clearly have a very long and enduring marriage, but every month I come back and there is a shelf that is empty. Oxfam does quite well out of me.’
And Britain’s high streets have done even better.
I have been old-fashioned and gone back to basics – we simply needed better bookshops
Library closures are a catastrophe. They are hugely important and recreating them will never happen