Waterstones’ full-year losses narrowed last year after slashing costs and slowing the rate of its sales decline.

Pre-tax losses fell to £23m in the year to 27 April 2013 – Waterstones’ first financial year under the ownership of Russian billionaire Alexander Mamut – from £37.3m the previous year, according to accounts filed at Companies House.

The pre-tax figure includes £5.4m of exceptional costs after the bookseller closed eight shops, made redundancies and property write-downs and restructured.

Waterstones’ total sales fell 2.9% to £398.5m in the year as it battled fierce competition from online players. But the rate of decline represented an improvement on the 14% fall recorded the previous year.

The 276 store retailer invested £29.5m in its shops including more in-store Café W coffee shops and broadening its product range. This was funded by a £12.4m cut in inventory levels.

Waterstones boss James Daunt is enacting a strategy to improve the bookseller’s in-store experience and embrace the rising in digital reading by selling rival Amazon’s Kindle.

Daunt said sales over Christmas were down slightly hit by a poor release schedule and stormy weather on its busiest day on December 23.

Mamut’s firm A&NN Capital Management bought Waterstones from HMV in 2011 for £53m.