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What will HMV do with Waterstones?

By | Published on Tuesday 6 July 2010

The Daily Mail says HMV might consider selling off its flagging Waterstones business, though that does seem to be based on the entertainment retailer’s top man Simon Fox admitting to the paper that “if anyone came along with a large bag of money for any part of the business, we would take that very seriously”. But he did then add that no one had, so far.

As previously reported, the HMV Group is doing rather well at the moment, though that is partly because of the firm’s recent diversification into other areas of the entertainment industry, rather than as a result of the performance of its traditional retail chains. The company’s books chain Waterstones, in particular, has seen revenues and profits slump.

But, while Fox would seemingly sell Waterstones if a good offer landed on his desk, such an offer seems unlikely for such a tricky part of the retail sector. Fox instead is putting his trust in a new management team who, he hopes, can turn things round for the last of Britain’s big book chains.

What actually seems more likely as a possible future solution to Waterstones’ woes is the merger of HMV and Waterstones stores around the UK, which could deliver considerable cost savings. While the two brands would probably be maintained, as sales of digital music and books continue to grow, even on the high street, both chains will need less floor space, and sharing premises will become more logical.

Fox has already admitted to the Mail that joint site operations are very much on his to do list, after a trial of a combined HMV and Waterstones set up in Newcastle worked well.