HMV sells Waterstone’s to Russian billionaire for £53m

Alexander Mamut promises to refocus Waterstone’s as local bookseller – and will install Daunt Books founder to run it HMV Group has agreed to sell its Waterstone’s business, which operates through 296 high street stores, to Russian investment billionaire Alexander Mamut in a £53m deal. Mamut said he believed the future success of the chain lay in “an undiluted commitment to books and bookselling” and promised to refocus Waterstone’s as a local community book store. The sale was announced on Friday morning with a trading update confirming a dismal trading performance across HMV’s businesses since the start of the year. Comparable sales within the group’s music and DVD stores fell 15.1% for the 17 weeks to 30 April, while like-for-like sales at Waterstone’s over the same period were down 8.4%. Mamut has said he will install James Daunt, founder of the Daunt Books chain of independent bookshops in London, to run Waterstone’s. Current managing director Dominic Myers will remain within HMV. The new book store boss has promised a “comprehensive review” of the business. In a statement he said: “Mr Mamut’s investment has been inspired and motivated by the opportunity to refocus the core business of bookselling towards a renewed customer responsiveness.” Mamut added: “The opportunity ahead to reposition Waterstone’s as a regional and local community orientated bookseller is an exciting one. The business enjoys a great loyalty from its customers and I believe that there is considerable integrity and value in the brand.” Mamut, who owns 6% of HMV Group, is said to be a friend of Chelsea football club boss Roman Abramovich and was previously an adviser to Boris Yeltsin. For a period he ran MDM-Bank, founded by billionaire Andrey Melnichenko and in 2007 he acquired US blogging site LiveJournal.com. According to Forbes, he has a net worth of $1.2bn (£740m). The sale of Waterstone’s, which employs 4,500 staff, will provide a major boost for HMV chief executive Simon Fox as he continues to seek new borrowing terms from the firm’s banks after dire trading results left the business heading for a breach of its loan covenants. HMV’s lenders are led by Lloyds Banking Group and Royal Bank of Scotland. He made clear the sale to Mamut would only go through if a new lending agreement could be reached. Proceeds from the disposal are expected to arrive by the need of next month, though HMV’s bank and pension trustees must first give their consent. Elsewhere HMV is pressing ahead with plans to close 40 stores in an effort to pare back its overheads. It is also exploring a possible sale of its Canadian business. “A sale of Waterstone’s to Alexander Mamut provides a good new home for the business,” said Fox. “We expect this deal to enable the group to achieve a reduction in [its] borrowing requirements, and, in turn, focus on plans for transforming the HMV Group into a broad-based entertainment business.” Waterstone’s HMV Booksellers Retail industry Media business Simon Bowers guardian.co.uk

Posted by on May 20, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.