26.03.10 | Graeme Neill - The Bookseller
A new e-book store, a repositioning of range, a greater focus on local promotions and increased non-book sales are among the strategies of Waterstone's to improve its business. The management of HMV Group is meeting City analysts today [Friday, 26th March] to discuss its future plans. HMV Group is hoping that the new initiatives at the bookseller will improve net profit margin in the short term to 2-3% and in the medium term to 3-4%.
This week the chain reorganised its buying team structure to allow individual stores to tailor its range. Among the other plans are a revitalisation of the brand "to reflect its specialist appeal", increasing non-book sales from 6% to 10% by 2013 and "maximising the Borders sales transfer opportunity". According to its presentation, there are £60m of sales from Borders up for grabs in locations overlapping with Waterstone’s.
The group is also envisaging savings of between £4m and £5m from the Waterstone's book hub for the 2010/11 financial year.
There is no mention of whether Waterstone's will change its store base but it appears HMV Group will try to renegotiate leases rather than exit stores. The statement said leases of around 42% of its shops would expire within the next five years, "enabling the group to target improved terms at lease renewal". The retailer will launch a new e-book store in May 2010.
Simon Fox, group chief executive, said: "We have a clear plan to quickly revitalise the performance of Waterstone's, and to maximise its position as the high street's last remaining book specialist."
The full piece at The Bookseller.
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