HMV fires boss of Waterstone's after Christmas sales slump

'Highly unsatisfactory' fall in sales despite the failure of high street rival Borders
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The Independent Online

HMV Group capped a miserable Christmas for high street booksellers yesterday by firing the managing director of its Waterstone's chain following dire festive trading.

The trading woes at the 313-store book chain overshadowed a robust performance at the entertainment retailer HMV over the Christmas period.

Simon Fox, the chief executive of HMV Group, described "as highly unsatisfactory" the 8.9 per cent fall in underlying sales at Waterstone's for the 10 weeks to 2 January. It ranks as one of the worst festive performances among listed retailers, which have largely delivered buoyant sales after consumer sentiment improved.

The managing director of Waterstone's, Gerry Johnson, pictured below, has left with immediate effect and has been replaced by Dominic Myers, who has been HMV Group's development director since 2007. Mr Myers will start a review of Waterstone's business "as a matter of priority", said Mr Fox. While he cited weak sales of celebrity biographies and the impact of the pre-Christmas stock liquidation at its defunct 45-store rival Borders over Christmas, he also listed a catalogue of self-inflicted errors at the chain.

He wants Waterstone's to return to its roots with a tailored offer for local markets, "holding fewer copies of the big celebrity titles". Mr Fox also cited the urgent need to "manage promotions more effectively" and admitted that had it lost focus on stores during the recent move to a centralised distribution system.

"We have been somewhat focused on the nuts and bolts and mechanics of the business and not on the customer proposition," Mr Fox added.

Philip Jones, deputy editor of the industry bible The Bookseller, said: "In terms of Waterstone's tailoring its offer to the local market, I think the publishing industry will be delighted. This has been cited for some time as one of the missing ingredients as the chain has sought to control things centrally."

Industry data shows how the book sector and celebrity biographies struggled at Christmas. According to Nielsen BookScan, high-street book sales fell by 9.5 per cent over the five weeks to 2 January 2010. Last year, the market slumped by 6.9 per cent.

Robert Clark, the senior partner at Retail Knowledge Bank, said: "The high-street book market is approaching crisis if Waterstone's does not pull its socks up because it is the largest operation by a long shot." Total sales at Waterstone's fell 9 per cent.

But Mr Fox said: "I passionately believe there is room on the high street for a specialist book chain."

HMV UK and Ireland saw its like-for-like sales rise 1.4 per cent in the 10 weeks to 2 January. In record trading for the third consecutive year, HMV sold 27 million CDs, DVDs and games, boosted by artists appearing on The X Factor, including Susan Boyle. HMV Group's total sales rose 5.5 per cent over the 10-week period.