Waterstone wins his books empire back
Thursday 26 February 1998
Tim Waterstone, who started book selling with a pounds 10,000 loan from his father-in-law, has formed a joint venture with electronics and leisure giant EMI and bought his old Waterstone's chain back from WH Smith. He sold 31 Waterstone's stores in 1989 for pounds 42m - a deal which netted him a pounds 9m profit.
As chairman of the new company, HMV Media, he will now control 106 Waterstone's shops which last year made a pounds 20m profit on a pounds 200m turnover. He will also try to apply his touch to the HMV music stores and Dillons book shops which come with the EMI part of the deal.
Electronics and recording giant EMI has been trying to pull out of retailing for some time to concentrate on the recording industry. It has now effectively ceded control to Waterstone and his private company, Advent.
The new company will compete with WH Smith as one of the country's biggest book and record retailers. The irony is that so much of Mr Waterstone's career has been intertwined with the WH Smith empire. He joined WH Smith in 1973 and was fired in 1981 after he set up an American operation that lost money. When he left his boss told him: "I suppose we'd prefer it if you didn't open a chain of book shops."
In fact, he used his redundancy money to open book shops that were much bigger than any seen in Britain before. They had a spacious feel that encouraged customers to linger and come back. His was one of the archetypal Eighties entrepreneurial success stories, but unlike the founders of Next and the Sock Shop the bubble did not burst and he sold a heavily indebted chain to WH Smith just before interest rates rose.
Last year, he founded a children's store, the Daisy and Tom children's shop in Kensington, west London, which he plans to float on the stock market. In keeping with the book shops, the children's venture is named after his three-year-old daughter and his business partner's son.
In a fiendishly complex deal, EMI bought Waterstone's from WH Smith for pounds 300m then sold it, its 78 Dillons stores and 271 HMV stores to the joint venture it created with Tim Waterstone for pounds 500m. The City welcomed the deal by marking up EMI shares by 15p and WH Smith shares by 5p after the news broke. EMI said there would only be a small number of book shop closures because of the merger; regulatory approval will be needed for the deal to go through.
The Dillons stores that form the deal are likely to be re-branded as Waterstone's and the whole company will be floated on the stock exchange in a few years.
`Rival bid' for Waterstones,
- 1 Malaysia Airlines MH17 crash: Pro-Russian rebel 'admits to shooting down plane'
- 3 Israel-Gaza conflict: The myth of Hamas’s human shields
- 5 Dutch paedophile club to fight their ban at the European Court of Human Rights
Lana Del Rey: 'I have slept with a lot of guys in the industry'
Peaches Geldof cause of death: 'Heroin addict' socialite had taken fatal dose of drug, inquest concludes
Peaches Geldof inquest: Tragic final moments of socialite's life reveal she lied to husband about failed heroin tests
Israel-Gaza conflict: The myth of Hamas’s human shields
Malaysia Airlines MH17 crash: Was a Russian-made missile really parked in this quiet square?
Malaysia Airlines MH17 crash: Vladimir Putin is given 'one last chance' to end hostilities in Ukraine
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
The truth about conspiracy theories is that some require considering
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: Massive rise in sale of British arms to Russia
Malaysia Airlines MH17 crash: victims’ bodies bundled in black bags and loaded onto trains
£49000 - £55000 per annum + competitive: Progressive Recruitment: My client is...
£48000 - £54000 per annum + Benefits package: Progressive Recruitment: My clie...
£35000 - £45000 per annum + competitive: Progressive Recruitment: If you're pa...
£45000 - £55000 per annum + competitive: Progressive Recruitment: SAP Business...