Waterstone's increases profit although sales fall and James Daunt takes leadership of the company

James Daunt's tenure at the helm of Waterstone's is likely to be about "revolution not evolution" as he begins his leadership of the company, according to a source close to the situation.

The new m.d. of the high-street bookseller took control of Waterstone's on Wednesday (29th June), as previous m.d. Dominic Myers exited the company. On the same day, the HMV Group announced the official completion of the sale of the chain to Russian billionaire Alexander Mamut's A&NN Group.

Waterstone’s increased profit by £6.7m last year as like-for-like sales fell by 3.8%, according to financial results released on 1 July.

The HMV Group announced in its financial report that in the 52 weeks to 30th April 2011, Waterstone’s profit grew from £2.8m to £9.5m. During that time however, total sales for the high street bookseller dropped by £14.4m to £499.2m and like-for-like sales fell by 3.8%.

Waterstone's “enhanced local offer and more selective discounting” meant gross margin improved 70 basis points in the year and “strong cost management” meant operating costs shrunk 4% during the same period.

Within the financial year, 19 Waterstone’s stores closed, 15 of these shutting in the final quarter.
The HMV Group revealed the cost of closing the stores totalled £8.3m with head office restructuring costs worth £0.5m. Total operating exceptional costs totalled £10.2m.