£53m deal for Waterstone's sale

HMV Group said it has agreed to sell book shop chain Waterstone's for 53 million pounds
12 April 2012

A Russian billionaire has vowed to secure a "dynamic future" for Waterstone's after striking a £53 million deal to buy the book shop from ailing HMV.

Alexander Mamut, a friend of Chelsea FC owner Roman Abramovich, plans to reposition Waterstone's as a regional and local community orientated bookseller, although he has not disclosed whether this will result in a cut in its current estate of 296 stores in the UK and Ireland. It employs 4,500 people.

Mr Mamut, who has appointed a leading independent book shop entrepreneur to run Waterstone's, said: "The business enjoys a great loyalty from its customers and I believe that there is considerable integrity and value in the brand."

The proposed deal, which is still subject to a number of conditions, was announced as HMV revealed a further deterioration in its trading performance. Sales for the UK and Ireland were down 18.8% in the 17 weeks to the end of April, leading to its fourth profits downgrade in as many months.

Debts have also climbed by more than expected to around £170 million.

Talks with lenders over a refinancing are likely to hinge on the successful completion of the Waterstone's sale.

Mr Mamut struck the deal through his investment from A&NN, which has interests in Moscow bookstore chain Bookberry, as well as Russian publisher Azbuka-Atticus, mobile phone handset retailer Euroset and social network site LiveJournal.

In order to rejuvenate the struggling chain, Mr Mamut said he planned to appoint James Daunt, a former investment banker. Mr Daunt currently runs Daunt Books, a small chain of highly regarded London-based bookshops he founded in 1990.

Analysts welcomed the price for the sale, but added that the refinancing for HMV would not be straightforward and that more money might be needed to bolster the retailer's financial position. Chief executive Simon Fox blamed "weak entertainment trends" for the retailer's continued poor performance.

On Friday it warned underlying annual profits for the year just ended will be about £28.5 million, down from its previous forecast of £30 million and the fourth time this year it has lowered its profit estimates. The live entertainment division, HMV Live, was the best performer with sales up by nearly 16% following the successful opening of G-A-Y in Manchester. HMV will open the Ritz, also in Manchester, in the autumn.

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in