The bookseller who doesn't read novels

Foyles' head Sam Husain tells Deirdre Hipwell about the book store's trust in value and service

Most people would be loath to admit that they had never read a book, especially those employed in a bookshop.

Yet Sam Husain, the chief executive of London's best-known book store, Foyles, has no such compunction. "I do not think I have ever really read a book from cover to cover," confesses the Pakistan-born accountant.

But Husain, who has headed the store for more than three and a half years, argues that the measure of success of his job does not depend on a love of literature.

"I knew nothing about this business when I took over," says Husain, who previously worked in TV post-production for Ascent Media. "But I brought with me good business practices."

This operating ethos was evident last month when the only loss-making bookseller reported a return to healthy operating profits – up from £80,625 to £434,588 in the year to 30 June.

The change wrought by the accountant is clearly welcome, but, he says, there is far more to come.

"Yes, it is a profit. It is not an outstanding profit, but it is a step in the right direction," he says. "And it is important for the industry as it shows an improving trend."

Foyles is now doing better than the rest of the bookseller pack, as its turnover grew 1.9 per cent to £23.1m last year, and like-for-like sales surged ahead by 9.7 per cent – compared with an overall decline in the British industry of about 5.6 per cent during the same period.

Last week Foyles opened its fifth store – Foyles Booktique – at Land Securities' One New Change shopping mall on Cheapside in the City, and next week it will launch a new and refreshed website to boost online sales and provide more customer services.

The mild-mannered and measured Husain, reflecting on the bookseller's turnaround, is keen to stress that he has only steered a modernisation process that was already well under way, under the previous chief, Christopher Foyle.

"When I joined, we had a three-year plan to get Foyles into profit, which meant getting the right structure, the right people and the right managers on the shop floor," he says. "My task was to get it into sustainable profit mode and to make sure the product was relevant. There is much more sharing of information about the company's profit performance with the managers now, which helps them to identify the key drivers for the business."

Husain says that, having set out a strategy for getting the people side of the business right, he then made sure Foyles cleared out books that were not selling. It was a scientific process carried out after compiling metrics data from sales per sq ft to head counts and footfall to determine which titles were selling and which were not.

"By getting through this process of making sure our operations were right, we bucked the [declining trend in sales] and our sales are well ahead of market indicators," says Husain. "It has meant that the cash flow has been good and the balance sheet is less heavily geared."

Foyles' financial structure is sound. Its share capital is small and it has £2m of debt with Barclays, which Husain says will have been significantly reduced by the end of this year. It has not paid a dividend for two years and has been recycling cash into the business.

"The shareholders have been happy to support the company," says Husain, as shown by their backing for the "Booktique" store opening – Foyles' fifth and smallest store at just 1,400 sq ft and positively dwarfed by its 40,000 sq ft Charing Cross main branch.

Husain is looking forward to selling books in the City's first shopping mall. "We think One New Change is a bit different from what is on offer in the City now and it is near St Paul's Cathedral," he says. However, he admits that Booktique's sales performance will not be without its challenges.

"We are known for our range, and Booktique is the first in the City and it is small," he says. "But we have set up a system to cater for that." The system is Foyles' first wholly owned electric van, which will deliver books to and from any of its five London stores. The van will allow customers to search for and order books online and arrange for deliveries to a bookstore of their choice for collection.

Opening a new store is not cheap and Foyles' fit-out costs can range between £150 to £200 per sq ft. Still, Husain says that now the "new system" has bedded down, he is keen to expand further – even going outside London.

"We would love to open more stores, but not if you have a landlord who looks at Foyles as simply a tenant that pays rents, because then we would have a problem," he says. "We want landlords to see us as a partner, and if we can find that, then we will expand. But if it's a landlord who just wants upward-only rents every three years we can't work with that."

One major new area of expansion that is not dependent on the costs of bricks and mortar is Foyles' online business, which at present accounts for only 5 per cent of its total sales. Its revamped website, to be launched next week, will be "a little different from Amazon" and packed with added value," says Husain.

"We have started again with a whole new website. It has different hosting facilities. We have used a different developer and have taken a look at the functionality to make it more enjoyable," he says. "But the main difference will be the speed of the website."

Husain also plans to further embrace the "ebook" digital market. "Ebooks allow the bundling of other services which consumers might like," he says. "For example, a book can be bundled with an author interview. The most interesting application is for the academic and research sector, where people could download textbooks or just a chapter of a textbook."

The new website will be up and running nicely in time for the Christmas season and Foyles' staff are already immersed in implementing the Foyles' Christmas campaign.

"Christmas is always a difficult and nail-biting time and we think it is going to be tough," says Husain. "In the past few weeks, we have seen a little bit of a slow-down. It is not that people are spending less when they come in the shops, it is just that there is less footfall, which reduces the spontaneous spend. But we are confident books make good gifts."

They do. But shoppers looking for heavily discounted book sales to make up the bulk of their Christmas present haul will not find succour in Foyles.

While supermarkets continue to sell books at huge discounts with a competitiveness that contributed to Borders administration last November, Husain says Foyles will not deviate from its strategy of favouring service and value over huge discounts. He says: "Borders heavily discounted [its books] and went head to head with the supermarkets. You often saw nearly all the books being discounted. We do not discount everything. We try to give our customers value – service, knowledge, information."

It is a strategy that is paying off, helped by a weaker pound and low interest rates, and Husain expects profits to increase further next year.

This is good news for fans of the bookstore. And even better news for those Foyles aficionados who cannot stomach the thought of the chain being headed by a man who doesn't read books is that, when probed, Husain divulges an interest in non-fiction.

"I like to dip in and out of books at different times," he says.

Foyles passes the Portas test – second time around

The reputation for customer assistance and professional expertise at Foyles' Charing Cross Road branch was dealt a blow in April when retail guru Mary Portas complained in The Daily Telegraph about shoddy service.

The "Queen of Shops" wrote that "a bored-looking bloke slouched over a computer" made no effort to help her with a simple request for The Line of Beauty by Alan Hollinghurst".

The clerk no longer works at Foyles.

The store's chief executive, Sam Husain, says: "We are so passionate about what we do that when that article was published some of the shopworkers were in tears. We would love to have her back in."

I visited the store on Friday with the same request to test the impact of Ms Portas's words.

Despite standing behind a desk marked "purchases only: inquiries to the information desk", the woman with a blue Lego earring happily helped with my search and directed me to where the book is on special display.

I went back later and asked her about another book. I gave her the title, The Universal Journalist, but not the author (the IoS's David Randall). She checked her screen and directed me to the relevant floor. When I reached it, I questioned a young assistant. She instantly cut off a conversation with her boss to point me in the right direction. Sure enough, the book was there.

Mary Portas would be pleased.

Trish Patchett, an Australian living in London, says: "I have never had an issue finding what I've wanted in Foyles, and the staff are always more than helpful. They really have everything that you could ever need in a bookstore, including a cafe. If they had beds in there, I'd happily move in."

A lifelong fan of the store, Tom Armstrong, says: "You always feel immediately at ease as soon as you walk through the door. I wouldn't be surprised if my Mum turned up with a glass of cold milk and a crumpet."

Additional reporting by Greg Walton