The rumors are true: the Guardian reports that <strong>HMV is planning to close up to 30 of its Waterstone’s book shops, give more space to higher margin items and reduce the number of high brow books, as part of an overhaul to restore the fortunes of the struggling business. Details of the restructuring were announced yesterday as HMV issued yet another profits warning, sending its shares almost 16% lower to 128.5p.
The head of Waterstone’s, Gerry Johnson, said there would be more emphasis on novels, cookery and children’s books and less on “academic and humanities” areas, which he said could still be bought online. When Waterstones bought Ottakar’s last year, it faced fierce opposition from authors and publishers who feared that the range of books on sale would fall. But Johnson denied that the chain was being dumbed down, pointing to the current promotion of the relaunched range of Penguin classics. Watersone’s sells almost one-in-two books in the high street. However, City analysts were mostly underwhelmed by the plans, saying they did not go far enough to address the rapid decline in sales of books, CDs and DVDs on the high street.
In the latest profit warning, the company said like-for-like sales in the nine weeks to March 10 were down 3%. Analysts had already cut their forecasts for the current financial year and are now expecting profits of around 50m pounds, compared to 98m pounds last year. The group hopes to save 40m pounds a year from the overhaul.