Good news for Waterstones as the group published an 80 percent jump in annual profits for the year ending April 2017.
After the use of ebooks threatened the sale of hard copies, Waterstones has seen a positive year following the sales of JK Rowling’s Harry Potter and the Cursed Child and other popular children’s books.
“When I took over Waterstones was bust, it was losing horrendous amounts of money and the Kindle was eating away at sales,” said James Daunt, the managing director of Waterstones. “It did look very bleak. Now it doesn’t, it’s nice and sensibly run, with every prospect of doing better still.”
It’s not only the success of books that are driving Waterstone’s sales. Non-book items such as stationary are now accounting for ten percent of the group’s turnover.
Pre-tax profits rose from £9.9 million to £18 million in the year to 29 April 2017. It is the group’s first profit since the 2008 financial crisis.
The rise in profits was helped by the 35 percent cut in administrative costs at the chain.
After a positive set of results, the Waterstone’s director is confident in expansion plans. The group opened five new bookshops in the run-up to Christmas and plans to open another 15 in 2018.
Russian billionaire Alexander Mamut put the book retail chain up for sale last year, with a price tag of an estimated £200 million. A number of private equity firms, as well as high street rivals, are expected to the interested in the deal.
“It doesn’t feel like a private equity deal because they have already done the turnaround,” said independent retail analyst Nick Bubb. “It feels like more of a trade sale. WH Smith could potentially get a deal past the competition watchdog, by saying it wants to develop Waterstones as a separate upmarket chain or to push into airports.”