Waterstone's boss out in the cold as sales slump again

Waterstone's MD Gerry Johnson is on his bike after another batch of bad results for the book chain.

A reminder that times are still pretty tough on the high street, despite the recent glut of positive updates: Waterstone’s MD Gerry Johnson has just been ousted from the bookseller, after an 8.5% plunge in sales in the five weeks to January. Waterstone’s continues to be the thorn in parent company HMV’s side, dragging down the group’s overall performance by 1.2%. Boss Simon Fox clearly thinks new blood may be the only way to get the chain back on track…
Johnson is paying a heavy price for the high street bookseller’s ‘unsatisfactory’ performance; he’s leaving the company with immediate effect. And Fox has wasted no time in appointing a replacement, with HMV’s group development director Dominic Myers taking over the top job. But there is some consolation for Johnson: he’ll apparently receive a year’s salary as a pay-off, which amounts to about £312,000. This will be paid in quarterly instalments, unless Johnson lands a new position in the next 12 months. Not much incentive to get job-hunting, we’re sure you’ll agree.

Waterstone’s disappointing results actually took the shine off a record performance at HMV, whose numbers will have been music to Fox’s ears: like-for-like sales were up 2.2% in the five-week festive period. It sold over 27m CDs, DVDs and games in the run-up to Christmas, while sales of technology products (including things like whizzy games consoles) were up 50%. Its fortunes have been helped in no small part by the collapse of rival Zavvi earlier last year, as well as the addition of temporary Christmas stores. So Fox does have something to smile about.

And despite its recent hammering, Fox says he’s confident about Waterstone’s prospects. ‘Whilst the recent performance of Waterstone’s has been unsatisfactory, it remains an excellent business and brand, with a great opportunity as the only remaining specialist bookseller on the high street,’ he said. But with consumers increasingly turning to the internet and supermarkets to buy their books, new boy Myers has a huge job on his hands to resurrect the company’s fortunes. Watch this space...

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