Waterstones: The Final Chapter?

Since the demise of Borders in 2009, Waterstones is the last book chain standing. This virtual monopoly should give the shop a position of unique privilege in the high street, and there is a reticence (or possibly cowardice) in the industry to say anything negative about the company, but despite the gushing press releases and recent puff-pieces about MD James Daunt, the results are stark.

According to the most recent published accounts, Waterstones' losses increased from £28m to £37m. The company pointed to increased Christmas sales in 2012, but this is set against a disaster of a festive period in 2011 and, bizarrely, includes the sales of Kindle devices in their branches, which means customers can go into a branch, buy a Kindle, see what they like, then order it for less from Amazon.

It is clear individual branches need to be the focus, to take advantage of the one thing Amazon can't currently offer: physical space. Waterstones' strategy appears to be taking away individual buying power from branches, selecting stock for all locations around the UK centrally, while allowing managers to choose the selling discount: in other words they are 'allowed' to choose £6.99 or £7.99 for books they weren't trusted to buy and probably don't want.

Marketing and reinvigorating of the brand is also key to bringing customers back in. Waterstones' response was to consult and remove its apostrophe - a move described in the trade as 'brave and bold'. Whether customers have noticed this radical step is debatable and the change has yet to be rolled out to all stores.

In addition, Waterstones says it is looking to get its "traditional customer" back. With the complete revolution of the book-buying world in recent years, it would seem unlikely this mythical book-sniffing, coffee-drinking customer still exists. As for the mid-range author, he or she is threatened with extinction; advances are down, sales are down, and publishers are taking fewer risks because why bother?

Today - so-called "Super Thursday" - demonstrates the depressing conservativism of what should be a radical brand. There will be so many copies of the latest Jamie Oliver and Sharon Osbourne there will be no room for the newest upcoming authors; Waterstones seems to have decided it is in competition with WH Smith and Tesco.

Recently one of my top authors went to his local branch to see how sales of his novel were doing: there were no copies left, they had sold out, and he asked if they'd be getting any more in. No, he was told, they wouldn't. In what other business do you sell out of a product then not bother to re-stock what's obviously popular?

Bookworm is one of the UK's leading young publishers