Waterstones’ managing director James Daunt has warned staff that a Brexit would have “adverse” effects and result in job losses.
In a frank email to Waterstones employees, Daunt said that Britain leaving the EU would cause a “significant retail downturn”.
He warned staff, including those at head office, mangers and booksellers, that the business would have no option but to return to cost-cutting, which would in turn lead to “the brutal reality of job losses and stagnant wages”.
He said: “For Waterstones, the impact on sales will reverse much of the hard-won gain of the last few years.”
Daunt told Retail Week today he felt it was important to express his views because the “consequences will be severe”.
“High-street retailers are highly sensitive to what is happening in the market, and if customer confidence falls, we will feel that,” he said.
In the event of a vote to leave, he said the business would experience “considerable difficulty”.
“We would have to cut costs and this would mean cutting jobs,” he added.
In February, Waterstones reported a significant narrowing of full-year losses from £18.8m to £4.5m for the 12 months ended April 27, 2015 after ploughing £8.3m into refurbishing stores and improving the retailer’s infrastructure.
Many retailers have appeared to remain impartial on the potential outcome of the EU referendum on June 23.
Daunt’s letter to staff in full
Many companies are telling their employees of the likely impact of a Brexit vote in the referendum.
For Waterstones, I believe it will be adverse. To borrow the assessment of Christine Lagarde, the impact will be pretty bad to very, very bad.
Most informed judgement is that Brexit will provoke a period of great economic uncertainty, and a significant retail downturn in consequence.
Those who deny this are blithe in their reassurance.
For Waterstones, the impact on sales will reverse much of the hard-won gain of the last few years. To survive, we will have to return to cost-cutting; return, that is, to the brutal reality of job losses and stagnant wages.
You may wonder why I offer no argument beyond this stark warning. The EU, after all, has much to recommend it as well as, in the opinion of many, considerable defects. My concern, however, is to be clear about the probable consequence of Brexit for Waterstones.