Waterstone’s now following in Borders footsteps

There's been an interesting story developing for the past month or so that I've been watching, but it wasn't until yesterday that enough pieces came together that I felt I had to post the story. Late yesterday the UK bookstore chain Waterstone's reported that they were cutting initial  orders by 20%. They had too much stock on hand and were making too many returns to suppliers. I know that might not sound like much, but Waterstone's parent company HMV Group didn't have a good Christmas season. HMV Group also owns HMV, a chain of media stores (which did poorly).

I hadn't reported on the HMV story when I heard about it because Waterstone's reported having a good season. I also didn't report on Waterstone's deciding to close 20 stores as a cost cutting measure. And I didn't report when HMV Group's suppliers couldn't get insurance to cover unpaid invoices.

Each of those stories are relatively minor but when you line them up, what do you see? I'm beginning to think that Waterstone's might be in trouble. They're not in the same situation as Borders, no- not yet, at least. But I think HMV Group are going pauper Waterstone's while trying to rescue the rest of the company. If and when HMV Group go into administration (the UK equivalent of US bankruptcy),  I don't think the bookstore will be anything but a shell.

image via Kake Pugh

About Nate Hoffelder (11479 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader: "I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

2 Comments on Waterstone’s now following in Borders footsteps

  1. This feel so much like a tipping point. Stores cutting down on orders = fewer traditionally published books = fewer profits = fewer traditional contracts = fewer books = few bookstores.

    Sad really that there doesn’t seem to be a way to make both formats successful. There’s still time.

    • The issue isn’t the format–p-book vs ebook–but rather of the Brick-and-mortar retailers’ inability to adjust to the reality that a significant portion of the market prefers to buy online for their dry goods commodities (books among them).
      eBooks are merely the straw that is breaking overextended camels’ backs. The B&M booksellers are caught in a bind because the bulk of their costs are fixed and they need a high volume of sales to break even and the volume either isn’t there (Borders) or is rapidly going away (Waterstones–apparently). eBooks are still a small fraction of the market and they’re not really cannibalizing a large enough number of customers but they *are* cannibalizing enough to tip the retailers into what may turn out to be a death spiral if they aren’t careful.
      Print books are extremely unlikely to disappear any time soon. But many B&M book retailer chains worldwide *are* in fact going to vanish. The survivors will be the ones who figure out how to prosper with significantly lower total print book sales.

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