Profits are riding high at Waterstones based on a modest sales gain; Barnes & Noble is a mess; Indigo sales are down
Financial reports have recently been released from the major bookselling chains, although the picture in the US will never be as clear as it once was now that Barnes & Noble has been taken private.
We’ll start with Waterstones, the UK bookstore chain led by James Daunt (who now also oversees Barnes & Noble). For their last fiscal year ending in April 2019, profits were dramatically up, and sales were fairly even with the last two years, with non-book items growing as a percentage of sales. Sara Grace at Publishers Lunch notes (subscription required) that the company carries significant debt, characteristic of private-equity owned firms. Waterstones also owns the UK chain Foyles (acquired in 2018), where sales fell 13 percent from the year before. Daunt commented, “We had Michelle Obama and it was a pretty strong year, and then the waters parted and some of the books that might have come in—Barack Obama and Hilary Mantel—didn’t and we had to rely on ourselves.”
Daunt compared today’s Barnes & Noble to what Waterstones was like in 2011 and 2012, which means: not looking very good. He admits Barnes & Noble “had a pretty awful Christmas.” But he’s hoping that the recipe he once formulated for Waterstones will work for the US chain—which means handing responsibility to local booksellers so they can get their shops right for the community.
Indigo, the Canadian bookstore chain, saw holiday sales fall 10 percent against last year. For the first nine months of fiscal 2020, revenue was down 8 percent. However, profits have improved, since the store is limiting promotional discounts and cutting costs (such as closing its New York offices). Like Daunt, Indigo’s CEO Heather Reisman blamed poor sales on the lack of a major breakout book to bring customers into stores. She said, “It’s the first year I’ve ever been in the business where there was not a single book, not a single book that gained any traction whatsoever,” she said. Last year in third quarter, Indigo’s top two books accounted for several hundred thousand units. But in 2019, “Our top couple of books didn’t altogether break 100,000 units this year,” Reisman said.
Interestingly, Reisman also pointed the finger at video streaming services for reducing nighttime traffic in the stores. “There’s no question that binge-watching and the amount of time people are spending on their technology, it’s having an effect on nighttime activity.” As an alternative, the store is trying to boost traffic on the weekends. Complicating matters: the coronavirus outbreak in China is threatening the release of Indigo’s new proprietary merchandise intended to draw customers into stores.
According to the US Census Bureau, overall bookstore sales were down by 5.7 percent in 2019. In 2018, bookstore sales were up by 3.5 percent.
Bottom line: Will Barnes & Noble respond to the same medicine that Daunt offered Waterstones? He seems confident there are only minimal differences between American and British customers, saying, “From what I’ve seen, we all read the same way.” We wonder if even the right remedy can work as well at a different time and place in bookselling.
Jane Friedman has spent her entire career working in the publishing industry, with a focus on business reporting and author education. Established in 2015, her newsletter The Bottom Line provides nuanced market intelligence to thousands of authors and industry professionals; in 2023, she was named Publishing Commentator of the Year by Digital Book World.
Jane’s expertise regularly features in major media outlets such as The New York Times, The Atlantic, NPR, The Today Show, Wired, The Guardian, Fox News, and BBC. Her book, The Business of Being a Writer, Second Edition (The University of Chicago Press), is used as a classroom text by many writing and publishing degree programs. She reaches thousands through speaking engagements and workshops at diverse venues worldwide, including NYU’s Advanced Publishing Institute, Frankfurt Book Fair, and numerous MFA programs.
