Waterstones faith finally changes
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UK bookstore chain Waterstones has posted its first profit in seven years.
The return from the red comes after the company reviewed its network, closing six stores and opening seven. It has invested £9 million over the last year (on top of £8.3 million in 2015) to refurbish stores, including opening cafes in 46 of them.
Mostafa Abd El Haleem, an analyst with GlobalData, says the cafes allowed the retailer to differentiate itself from its competitors.
The return to profit also reflects a recovery in the book market after a period when it struggled to compete with online retailers and the growth in eBooks.
“Waterstones has widened its product offering, benefiting from the growth of children’s books, seeing a 25 per cent rise in sales since 2010, with titles from Patrick Ness and Katherine Rundell performing particularly well,” says El Haleem.
“The future for Waterstones looks brighter than it has for some time. E-books no longer pose the sort of digital threat that continues to devastate physical music and video sales, as consumers spend less time on e-readers in favour of mobile phones.”
He said physical book sales continued to grow in the UK in 2016, “and we expect Waterstones to have been a key beneficiary of this”.
Questions & Answers
Q.What specifically contributed to Waterstones' return to profitability, beyond store network adjustments?
What specifically contributed to Waterstones' return to profitability, beyond store network adjustments?
The company diversified its offerings, capitalising on growth in children's books, which saw a 25% sales increase since 2010. They also invested in refurbishing stores and opening cafes in 46 locations, helping them stand out from rivals.
Q.How much has Waterstones invested in store improvements over the last two years mentioned?
How much has Waterstones invested in store improvements over the last two years mentioned?
Waterstones invested £9 million in the last year, following £8.3 million spent in 2015. This totals £17.3 million allocated to refurbishments and other store enhancements across those two periods.
Q.What changed in the e-book market that benefited Waterstones and other physical book retailers?
What changed in the e-book market that benefited Waterstones and other physical book retailers?
E-books no longer pose the same digital threat as before, with consumers spending less time on e-readers and more on mobile phones. This shift has allowed physical book sales, and Waterstones, to recover.
Q.Which specific product category has shown significant sales growth for Waterstones?
Which specific product category has shown significant sales growth for Waterstones?
Children's books have been a key growth area for Waterstones, with sales in this category rising by 25% since 2010. Titles from authors such as Patrick Ness and Katherine Rundell have performed particularly well.
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