By Hannah Johnson
Waterstone’s parent company HMV announced this morning that it would sell the UK book chain to Russian billionaire Alexander Mamut’s company, A&NN Capital Fund Management, for GBP 53 million.
In a surprising move, The Bookseller reports that Waterstone’s current Managing Director Dominic Myers will be replaced by James Daunt to run the bookstore chain after the deal is completed. Myers will take on another role within HMV.
Myers spoke at the Book Industry Conference earlier this week about social networking and the bookselling industry in general. Of the impending sale of Waterstone’s, Myers told Publishing Perspectives on Tuesday before the announcement, “It’s quite unsettling having it played out in public, but I’m confident of a positive outcome for the chain.”
Daunt, the founder of Daunt Books (a six-store book retail chain in London, which we profiled last year), told Roger Tagholm for The Bookseller that his plan for Waterstone’s is “to keep the shops open and make them vibrant, prosperous places. In an ideal world one would not be closing shops. It may be that some prove irredeemable — the real question is: is there room on our high streets for 300 stores and I believe there is.”
Despite months-long rumors that the chain’s founder, Tim Waterstone, would be involved in the company after the sale, Daunt announced today that Waterstone will play no role in the future of the chain.
In another report from The Bookseller, the response from the industry to this announcement appear to be positive across the board. Reactions from people across the British publishing and bookselling industries are enthusiastic and optimistic, both about the book chain’s future, as well as Daunt’s leadership and commitment to the bookselling business.
HMV struggled to meet financial expectations this year, facing heavy competition from online and supermarket retailers of music, movies and books.
HMV ends its fiscal year on April 30, which is when its lenders would officially asses their debt and overall finances. However, HMV negotiated earlier in the year to delay the evaluation of their debts until July 2, probably with the sale to Mamut in mind. If they can complete the deal with Mamut before their debts are assessed by the lenders, the company ends their year on better financial footing, which improves its status as a publicly traded company.
The deal is contingent upon approval by HMV’s lenders, and according to a press release from HMV, the company expects its lenders to support the deal.
The Wall Street Journal reports that the announcement of the sale boosted HMV shares by 10% at the opening of London trading this morning.
According to the press release, HMV attributes Waterstone’s financial situation to a increasingly competitive market: “The Group’s Waterstone’s and HMV businesses operate in markets where there is significant structural change driven by digital delivery and intensifying price competition from supermarkets and internet mail order. The sale of Waterstone’s will enable management to focus more closely on executing the turnaround at HMV and continuing to develop the HMV customer offering.”