STRUGGLING RETAIL group HMV is to sell the Waterstone’s book chain to Russian billionaire Alexander Mamut in a bid to cut its debt.
HMV, which bought Waterstone’s from WH Smith in 1998, will use the £53 million in cash from the sale to pay down its rising debt and stave off lenders.
The sale is conditional on the group being able to refinance its loans on “satisfactory terms”, it said yesterday.
The group cut its full-year profit forecast for the fourth time so far this year.
There was a further 8.4 per cent like-for-like decline in Waterstone’s sales in the 17 weeks to the end of April compared to the same period a year earlier. The group said Waterstone’s sales had deteriorated “due to weakness in the book market and some loss of share”.
Specialist booksellers have faced intensifying competition from both e-books and supermarkets.
The HMV chain fared worse, however, with sales at its UK and Ireland stores plunging 15 per cent over this period.
Mr Mamut’s ANN Capital Fund Management appointed James Daunt, the founder of the well-regarded London-based Daunt Books, as head of the 296-store Waterstone’s chain.
The Russian billionaire also owns 6.7 per cent of HMV Group. According to Forbes magazine, he is the 42nd richest person in Russia and is worth an estimated $2.3 billion.
Waterstone’s operates three stores in Ireland, including Hodges Figgis on Dawson Street in Dublin, and Waterstone’s-branded stores in Cork and Drogheda.
Some 46 people – around a third of its Irish workforce – were employed between the two Irish Waterstone’s stores on Dawson Street and in the Jervis Shopping Centre that closed in February.
Waterstone’s Ireland suffered a loss after tax of €8 million in the year to April 24th, 2010, compared to a profit of €1.2 million the previous year. (Additional reporting: Bloomberg.)
