Waterstones sold to investment company

[Brian G Turner]

Possibly a brighter future for Waterstones, not least when there's talk of accelerating new store openings: Waterstones sold to US hedge fund

However, the focus still appears to be overwhelmingly on the retail experience, which seems to be undergoing a long-term decline - so I'm really not sure if Waterstones is looking to do or offer anything new, especially for the digital age.

 

[Abernovo]

My worry would always be that equity firms are looking for profit, and answer to shareholders/investors who often only care about returns--the bigger the better--not the actual long-term business model. I hope Elliott Advisors are not the sort who are after buying just to dismantle and sell the composite parts for profit in a few years.

Have to wait and see. If they're not, maybe we'll see Waterstones grow.

 

[Jo Zebedee]

They don’t seem to follow that model and Daunt is still in place so I suspect not

 

[Overread]

Hopefully they are in it for the books not just the er profit books - though of course the profit margins must still be met (many a company has gone under because they were all product and no margins). Still if a company sees potential that's a good thing!

I can see Waterstones surviving but only if they diversify. They won't beat Amazon for range of product and they are in no way going to win the online nor digital market. But if they can get food outlets in their shops; if they can sell more than just books (In the UK Waterstones are about the last place you can get board games, magic the gathering cards and other often geeky products not just books).

Still the highstreet is a hostile world and even solid companies are finding it hard to compete there.

 

[Stephen Palmer]

Most of my friends are very gloomy at this news.
Hedge funds, including this one, are only interested in short-term profit.
As a friend remarked on FB, the practice should be banned. It's basically brutal exploitation.

 

[Dan Jones]

I too share Stephen's reservations, as most investment managers will only look to turn a quick buck, but you never know, there might be somebody in Elliott might actually love books. Though even that wispy optimism is countered by the fact that that doesn't cut the mustard in business.

As for how Waterstones can survive, I'm firmly convinced that events maketh the bookstore these days. People want an experience, and Amazon can't do that. Hosting reading and writing groups, signings, having on-site cafés are all good, but hosting regular, frequent events are the key.

 

[Jo Zebedee]

But Waterstones are really hard to have events in. They take 50% of the cover price for specialist events. That leaves the average writer making less that 50p per book (I’m being generous). They will no longer buy in books from Lightning Source - I’ve ran into this with Waters and the Wild with a store interested in running an event with me. As events go most authors I know - at the indie end of the spectrum - either won’t or can’t use Waterstones for an event.

 

[Dan Jones]

To be honest, I think signings are probably the harder sell, and of my list I'd put that way behind things like regular writing or reading groups, which are their own audience. I'm thinking from the bookshop's perspective, not the author's.

 

[Jo Zebedee]

To be honest, I think signings are probably the harder sell, and of my list I'd put that way behind things like regular writing or reading groups, which are their own audience. I'm thinking from the bookshop's perspective, not the author's.

I’m taking the perspective of an event organiser running a reader’s event or writer’s event - which I do quite a lot these days. If I do that in W’stones I create a two tier event with some writers able to sell and some not - inherently unfair for those taken part (esp if it’s not a book festival and there is no pay for the readers/writers). Those are the events Waterstones want - and yet more and more of us use indie shops (which will take stock for the event and charge 35%) and libraries - which take nothing out of any sales and which, if you can get a book club reading in, will purchase in multiple copies.

 

[Dave]

A few of the shop locations would be ideal to turn into residential flats.

 

[thaddeus6th]

I hope this doesn't lead to their shops being decimated*...

*And yes, I'm using the term properly, 'common usage' heretics.

 

[Dan Jones]

A few of the shop locations would be ideal to turn into residential flats.

Shush, you! You never know who might be reading...

 

[Brian G Turner]

A few of the shop locations would be ideal to turn into residential flats.

I keep remembering this quote from the piece:

Mr Daunt said Waterstones was opening more shops at the moment, because the retail downturn was leaving empty space in desirable locations which the book chain could snap up.

and am left wondering if Waterstones will end up as a trojan horse for property investment.

 

[The Big Peat]

I’m taking the perspective of an event organiser running a reader’s event or writer’s event - which I do quite a lot these days. If I do that in W’stones I create a two tier event with some writers able to sell and some not - inherently unfair for those taken part (esp if it’s not a book festival and there is no pay for the readers/writers). Those are the events Waterstones want - and yet more and more of us use indie shops (which will take stock for the event and charge 35%) and libraries - which take nothing out of any sales and which, if you can get a book club reading in, will purchase in multiple copies.

While not disputing this - or saying it doesn't suck - I don't think it changes Dan's point that events and "an experience" are how brick and mortar book stores retain their relevance and profitability. Just because they're not doing it well doesn't mean its not the right thing to do.

I'm also guessing that from their point of view, they're not doing it badly so much as concentrating on higher profit margin events. I wouldn't dispute it either if you told me they were wrong about what higher profit margin events are - personally I'd have thought strong local links was the way of the future.

Which is part of why I'm just shrugging on this. If it works - cool. If it doesn't - it just opens up space for better booksellers.

 

[Harpo]

My nearest branch is 127 miles away, on the opposite side of Scotland.

Or I could trek the 293 miles down to Glasgow, which has six branches.

[sarcasm] Flats, yay. And the money raised could be used to turn thousands of empty houses into bookshops [\sarcasm]