Review – ‘The Face Pressed Against a Window – The Bookseller Who Built Waterstones’.

This is a fine book, particularly if you want to know more about how ‘Waterstone’s the Bookseller’ was built. Waterstones is a great business, and despite many earlier difficulties, it continues to be very good at its business. I do trust that this will continue well into the future.

The book is well written, and the author is keen to speak quite a lot about his own background before the growth of Waterstone’s. I don’t think I’d realised before, but the Waterstone’s book chain was being established from 1982-1993, whilst I was at STL Distribution in Carlisle, Cumbria.

In my view, Sir Tim (81) is first a businessman and then a bookseller. However, his bookshops are extremely good, and have stood the test of time for a very long while. Tim sold Waterstone’s to WH Smith’s eleven years later (they had sacked him previously). Wonderful!

Happily, Sir Tim Waterstone gave me a foreword to my own book on ‘Your Christian Bookshop – A Complete Resource’ (Jay Books) in 1992. I was clearly aware of him, but I had no idea that Waterstones would become the extensive business that now covers the whole of our country.

He says in the foreword, ‘I believe that the world of Christian bookselling is ready to go through the same revolution that general bookselling has been going through in the last few years. There is nothing to fear’.

Tim’s book is in two parts. Firstly, there is the overview of his own life – from his childhood in Crowborough (he didn’t get on with his own father at all), as a colonial boarder in Warden House, onto Hawkeshurst Court and then to Tonbridge School. Onwards to St Catharine’s College in Cambridge, and then some time in India to join a Calcutta broking firm, before then embarking on his own Bookshop chain, Waterstone’s.

During this time in India, Tim married but in a few years this marriage broke up. However, Tim says really nothing in the book about this time, and actually later on, the same happens again – and again nothing is said. Between all of this, Tim had a depressive breakdown, but fortunately this did not occur ever again.

The second part of the book looks at how Tim started Waterstone’s. On returning from India, Tim joined Allied Breweries followed by WH Smith. Whilst in America, working on behalf of WH Smith’s, he was dismissed by the WHS Chairman who apparently said to him, ‘We don’t really mind what you do now, though we wouldn’t want you to go straight out and open a load of bookshops in competition with us. That we would stop!  Tim writes, ‘I was angry, but at the same time I was exhilarated’.

The idea that stood out for me was just how much time he had put into growing his own Bookshop business. It was clearly part of him. Sir Tim had been looking at this idea for a long time before starting the business in 1982.

Initially, Waterstone’s was actually a ‘rollercoaster ride’ and Tim put in a lot of his own money in those early days. He was able to obtain bank lending at a time when retail was doing very well (there was no Amazon, for example), and Tim knew exactly what he wanted from his own Book chain.

His mantra was ‘perfect stock, perfect staff, perfect control’.

I guess he sold it at time when a number of factors were coming into retail, which ultimately affected how, good or bad, these businesses would become. Following that first sale to WH Smith, Waterstones went through a 10 year period – under HMV Media – when it really struggled. Tim was part of this till 2001, and eventually he had to stand down, upset by all that was happening around him.

Ultimately, in 2011, Tim became the Chairman of the new company with James Daunt as CEO, and owned by the Russian billionaire, Alexander Mamut. Interestingly, Tim still speaks very lovingly about Waterstones as a business, and his comments – now – about the Elliott Advisors involvement in the business are very illuminating (p273).

I wish Waterstones well. They have an excellent brand, and many book lovers would generally buy from them, as opposed to Amazon. Most UK towns and cities have a Waterstones present, and I trust that this will be the case for a long while yet.

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The Face Pressed Against a Window – The Bookseller Who Built Waterstones

Sir Tim Waterstone

323pp, 2019, Atlantic Books

ISBN: 978-1-78649-634-4

Book Trade – Trends in the Wider Market

Canadian retail blogger, PaulThinkingOutLoud was upset recently by one publisher’s website and its aggressive discounting policy. Writing in his blog – which is well worth following – he saw this as

 ‘Another example of a publisher or distributor bypassing the brick and mortar stores. Although some of this might be legitimate overstock inventory, it raises the expectation of consumers for this level of discounting to be normative, which adds to the discouragement of already battered retailers’.

In another post, Paul writes movingly of competing emotions during the closure of one of his stores. He ends with an appeal to press on towards the goal of in-store ministry.

Do you feel battered by falling sales or emboldened by spiritual opportunity? Yes, Christian bookshops continue to close, footfall is in decline, competition from online is savage and at best support from churches is patchy. Yet we are not always that well informed of current trends in the wider publishing scene. In the same way as what happens in the USA often affects the UK, the same is true of events in the general market impacting the Christian trade.

Generally speaking, our grasp of the financials on both ‘sides’ is often lacking. Retailers operate on lower margins with high fixed costs (upward only rents, rising business rates – up 2.6% again in April) whereas publishing in the main has higher margins and a far more flexible cost base. Clearly there are worries on all sides and as publishers face lower physical sales, print-runs continue to fall making the viability of mid-list titles ever more tenuous. Many publishers struggle with storing high levels of physical stock, much of which will eventually be written-down. Ironically for publishers, digitalisation represents yet more cost and a growing overhead; this, coupled with falling average cover prices (ebooks sell at half the average price of a paperback: £3.21 v. £6.31).

Our industry is a torrid place. The physical consumer book market declined by 4.6% in value in 2012, with fiction down 4.5% and non-fiction down 6.3% – only Children’s books held steady. The value of print sales slumped by £74m last year. (It could be worse – in Australia their market fell 6.3%). The marketplace churns violently in a volatile landscape; over 200 libraries were closed between 2011/12 and in another sign of turbulence, Cambridge University Press ceased print production on their Cambridge site after 400 years.

Yet 2012 saw the continued growth in digital publishing, social media marketing and self-publishing. Hive became established. Amazon’s Kindle grew faster than ever and a number of other e-readers, notably Nook, Kobo, and Nexus gathered momentum. Controversially Waterstones began to sell Amazon’s Kindle, recognising that they had neither the time nor money to develop their own platform. The Fifty Shades publishing phenomenon came out of nowhere ending the year with sales of £47.3m.

The market for ebooks was revised upwards to £300m late last year and continues to grow, albeit more slowly. Major publishers report e-sales of between 8% and 17% of overall revenue. In November, the ebook agency price probe in the USA and the EC brought a chill to the major houses as they battled against what felt like unfair external pressures. Now ebooks sell for an unsustainable 20p (a marketing idiocy pioneered by Sony) and most slots in the Kindle top 20 are populated by cheap ebooks. Nielsen data suggest that there are 7m UK ebook adopters, with heaviest use amongst ages 35-44, lowest in the under 20’s. However, the BBC reports that just as many UK adults, 7.4m or 15% of the population have yet to access the Internet.

Bookshop closures continue apace with The Booksellers Association figures documenting ongoing decline: down to 1,028 shops (2012) from 1,535 in 2005 – conversely Children’s bookshops are thriving with more opening this year. In the USA, the one surviving major bookstore chain, Barnes and Noble announced after Christmas that they expect to slim down store numbers by a third. B&N have 689 stores currently with 190-240 of these slated to close over the next decade. It’s a widely held view that the holy grail of ‘Discoverability’ is best achieved in a physical bookshop; browsing activity is their USP.

The debate over the future of our libraries is equally as fierce. The UK Government’s Sieghart ebook library lending review is yet to report but author, Terry Deary said recently: ‘Libraries have had their day. They are a Victorian idea and we are in the electronic age’. How to win friends! It’s worth noting that the PLR on printed books from library lending is more than £6m paid out to 23,000 authors. The debate remains live as people continue to ask if digital will trounce the physical book or whether in due course it will all settle down benignly?

There’s a lot of anger amongst booksellers towards the perceived lack of a level playing field. Writing in The Bookseller, Charles Tongue of the Stroud Bookshop said, ‘I believe Publishers are blindly colluding with Amazon and the result will be the destruction of High street retailing’. He was widely applauded.

I like Foyle’s of London advertising slogan; This Bookshop Will Change Your Life – no ambiguity there! Earlier this year, Sam Husain, CEO of Foyle’s sent an open letter to publishers arguing the need for better terms (an average of 60%) and increased support (promotional stock on consignment). He stated that the current bookshop model is broken, needing a complete rethink. This at a time as Foyle’s announced eight redundancies. Bravely, Foyle’s and The Bookseller have since conducted a two-day ‘Re-imagining the Future Bookshop’ workshop, held in London, allowing the trade to collaborate on what the bookshop of the future might look like. 

WH Smith continue to do a sterling job in showcasing books but even their sales fall year on year; down 7% to the end of August 2012 and down a further 6% in the 20 weeks to mid-January 2013. Another indication of the parlous state of the High Street trade is wholesaler Gardners sales results which dropped 3% to the end of February last year. Blackwell’s did improve their results last year but remain loss making.

Waterstones is far from being out of the woods with the release of poor results (admittedly pre-James Daunt) showing a £37.3m loss. I wish Waterstones well because if their 290 branches were to disappear from the High Street then it would be a very serious matter, and I might add, particularly for publishers. However, I’m encouraged for two reasons: anecdotally, people seem very warm towards the ‘W’ brand and some are switching their buying away from the mighty ‘A’. The question is, will it be enough? Waterstones iconic branding campaign last autumn was well received and this year it has plans for the refurbishment of another 60 shops.

My other reason is that when I visit Waterstones, they generally prove to be busy places and people are markedly buying books. It’s just a shame that Waterstones do not ‘do’ Christianity better and with more visibility. On a positive note, I welcome the announcement by Waterstones of the launch of its staff-training academy and Certificate in Bookselling (accredited by the University of Derby); surely a vote of confidence in its own future by a visionary book chain?

Maybe I’m pipe dreaming? After all, Amazon had overall sales in the UK in 2011 of £2.91 billion (on which they famously paid £416m UK tax). They reported Q4 worldwide revenue growth of 22% to £13bn last Christmas! Latest innovations include customer collection lockers in railway stations and newsagents. This is an immensely powerful online juggernaut and our small trade faces a very significant challenge indeed!

Yet I dare to believe that localism can prevail, customer attitudes can change and that people continue to care about their local shops – you must just hope that I am right! The demise of retailers, Jessops and Blockbuster earlier this year followed by HMV going into administration shows just how tough conditions are. Incredibly, HMV was selling 27% of all CD’s and 38% of DVD’s at the time of its demise.

I would echo Philip Downer’s (ex-Borders) comment from last year;

 ‘The old days of Borders and Ottakars will not return … Coffee, carrot cake, cards and an ebook offer are now essentials for Indies who want to stay in business and thrive for the future’. 

We have to give customers a reason to come to our shops. Why should they shop with you? I was recently handed a forward-dated 15% off voucher for a national (non-book) retailer. It worked. I visited the shop on the stated date, I used my voucher … and I bought far more than I had intended. In the Christian trade we must start thinking more creatively and connecting with customers in a very different way to the past.

Church engagement is a hugely important topic that needs far greater attention and one to which we shall return in the next issue. Many shops find difficulty in communicating with ministers. An earlier church / retail compact has seemingly broken down as leaders shop around – usually online – driven by ‘best price’ owing to the Churches’ own financial constraints. Managers struggle to venture outside their own premises due to low staffing levels or sometimes, unwillingness. And yet, somehow, retailers have to get back in touch with their core customer base – the Churches.

The days of waiting for a church to contact you are long gone. It’s often a salutary task to record daily footfall and till data – but it may just serve as the severe jolt you need in order to take action?

This article was written in early March 2013 for Together Magazine (April – May 2013)