The announcement of a deal to sell Waterstones is good news for the bookseller but where does it leave HMV?

HMV has this morning confirmed it has reached agreement to sell Waterstones to Russian tycoon Alexander Mamut for £53m. It’s a better price than the £35m some have been mooting and buys HMV breathing space as it renegotiates with its banks.

Mamut’s appointment of James Daunt to run Waterstones is really interesting. Daunt is a proper bookseller and his stores in London are terrific. I’m sure one of his first moves will be to take Waterstones back to its bookselling roots.

We highlighted on the front page of last week’s Retail Week some of the eclectic - some may say increasingly desperate - product ranges appearing in Waterstones, with the display of Easter eggs in our local Camden store two weeks after Easter being particularly striking.

I’m sure Daunt will stand for none of this. The problem with Waterstones over recent years - which current MD Dominic Myers has been trying to grapple with - is that it has stopped being a book-lovers bookstore, which meant that there was no reason to anyone to go there ahead of WH Smith or the local supermarket.

Yet I’m convinced that in the medium-term there is a role for a serious UK-wide bookselling chain, although ebooks will present a formidable challenge in the years ahead. I’m not sure the Waterstones of the future needs to be 300-stores strong and I suspect some will have to close, but there are enough people who enjoy the social experience of browsing and buying books for Waterstones to be sustained if Daunt can get the offer right.

The bigger concern is HMV. Of the group’s two chains, Waterstones has been the better performer and the update this morning shows sales at HMV are going from bad to worse. The introduction of more technology product to some stores seems to be doing OK, but a bit like t-shirts, gaming zones, cinemas and the rest of the things Simon Fox has tried, won’t be enough to give HMV a long-term future in its own right. The stores I’ve been into lately have felt like morgues. Now Simon looks like he’s got his breathing space, the repositioning will have to step up another gear if he’s to come up with a reason for HMV existing in the future.

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