Apostrophes to go. (Originally written April 2004)

Waterstone’s, the country’s largest bookseller, has announced today that it will be making all apostrophes in the business redundant.

Managing Director Steve Knott said, “The apostrophes have given many years service to Waterstone’s but we feel that they are no longer relevant to our offer.” Knott, who has recently joined the bookshop chain from HMV, has been looking at the roles of all punctuation marks in the business and is understood to be unhappy at the number currently employed above the letters.

“It isn’t clear to our customer base what the apostrophe is for. Market research shows that most of our target market think it is a comma that has slipped a bit.” Waterstone’s sales have boomed lately as the chain has targeted it’s marketing at people wishing to buy books by Nick Hornby. “He’s that chap who wrote about a record shop”, says Knott, “and one about football”.

The apostrophes are understood to be being offered standard redundancy terms. Some will be offered jobs as commas or junior positions job sharing with extra dots from the letter I as semi-colons. A few will team up as Umlauts although it is unclear what use Knott will make of these.

This appears to be one of several initiatives introduced by Knott to prepare Waterstone’s for floatation. Other initiatives are ensuring there is no dust under the microwave, no books in the staff room and all back shop floors are to be greased and tilted towards the door to the shop floor. Later this year bungee cords are to be attached to all staff to ensure that they can only go ten yards away from their store. “We can’t have them going home”, jokes Knott. “We introduced this policy for Managers before Christmas and it’s been a huge success. None of them go home at all now and as a result they’ve stopped having any ideas of their own and just do what they’re told with a glazed look. It’s brilliant.”

Waterstone’s, who’s stock consists of only three books stocked in huge quantities, are valued by analysts at 3p.

A Phoenix Run by Asses

So, without fanfare or fuss, the deed is finally done. HMV now owns Ottakar's and has ensconced the usual suspects onto the board thus signaling that they intend to bring their uninteresting formula for bookselling to the home of experimentation, fun and love of books. And, indeed this weeks announcements show just that. The Ottakar's name will disappear from our high streets by the end of the year.

Ottakar's is ripe for development of course. The lack of a computerised stock control system in the chain has left it reliant on physical stock checks to maintain the quality of the stock. Even the most thorough branch will have allowed titles that sell in significant numbers to sell out and have simply not replaced them. During the period when I was a senior manager in Waterstone's I would regularly run the same report when visiting a branch, asking the system to tell me what that store had sold more than three of over the past six weeks that they were currently out of stock of and did not have on order. I never got a report with less than 100 items on it.

In Ottakar's this kind of report, which is virtually running in the background on the excellent Phoenix 9, is worth upwards of an extra ‚£10k in top-line sales every year. And because Phoenix is not reliant on booksellers regularly checking stock by hand there is a significant saving to be made on staff costs too.

So there you have Gerry Johnson's magic formula. Having bought the chain for a knock down price they will, without expending too much effort, be able to prove that their ownership of their rival is, in economic terms. "a good thing".

Crowds will cheer; tickertape parades will be held; the children of the British booktrade will walk hand-in-hand towards a golden sunset. Except, hang on. I have a question.

If Phoenix 9 is so good and Waterstone's management are so sharp at managing costs then why are Waterstone's doing so badly? If Ottakar's can easily be turned around by a computer programme and the laying off of some superfluous booksellers then why were recent results in the two chains so similar? Ottakar's sales were down 8% at their last trading update in March; Waterstone's were a little over 6% down for the full year in July.

Could it possibly be that Waterstone's, despite the excellent tools at their disposal are actually not very well run?

Hmm...

Why Your Pension Will Kill Your Bookshop

The current model of high street bookselling cannot sustain itself. The cost base of any high street shop is part of a complex economic web that involves many other parties. I'll try to give the easy version. Most high street properties are owned by pension funds. The under performance of pension funds is well documented and the fund managers are forced to try to work all of their investments harder just to get close to the sort of returns that they enjoyed 20 years ago. This means that retail rents are being ratcheted up in order to provide that return. The result of this is that retailers who work from a relatively low margin base (booksellers, CTNs, record shops) are the first to feel the pinch. They cannot, in the current environment, put prices up. Indeed, their suicidal discounting and the supermarkets strategy of loss-leading on books has lead to a perception that books ought to be cheaper. There is no way for these retailers to squeeze their other costs much more. Their staff are already badly paid; their stores are, in many cases too big; there are often too many of them in any given town or city. Put this in the context that I've already discussed and you have imminent store closures on massive scale. Waterstone's and Ottakar's only overlap in 30 odd locations but I'm willing to bet that, if that merger goes through, we'll see more than 30 stores close down in the next couple of years.

Other retailers, with a higher margin base (food , clothes, electronics, - i.e. supermarkets) can partially absorb these increased costs via their high margins. (A book is, on average marked up by 100% so a £6.99 paperback costs the bookseller roughly £3.50. A pair of jeans is marked up by anything up to 500% so it's possible that the £60 pair of jeans only cost the store £10.) They are also able to put up prices on own branded products in a way that is just not available to a bookseller. You can only buy a Gap shirt in Gap so how would you know that it is costing you more than it used to?

Which of us, in all honesty, wants our pension fund to not strive for a maximum return on our nest egg? Which of us wants the goods we buy to be more expensive? We can't have better pensions and cheaper goods at the same time. Put another way, the better pensions we enjoy as a result of these hikes in shop rents will be eaten up by a rise in the cost of living.

It is this conundrum at the heart of retailing that will put the final nail in the coffin for high street bookselling as we know it. Sure, the supermarkets and the internet are threats but Amazon has an 80% market share of online book sales. A market share that high is easy to attack from below. Both of the major chains have announced plans to launch their own transactional web sites. It's the right strategy. It may be a bit late (duh!) but it's right. Yes they are threats but it's the threat to the cost base posed by rental hikes that will be the killing blow.

Shredding CVs Like The Americans in Saigon

Sorry for my absence over the past month and a bit: I've been closing down a bookshop.

No kidding. It's the least amount of fun you can have without a trip to the dentist.

Not only is it lousy fun it's also hellishly busy. You have no idea of the sort of things you have to consider. Have you, for example, shredded every single speculative CV and customer complaint letter? I don't know about you but, because our glorious industry is regarded by young arts graduates with such warmth and affection (ie. they think it's a doss), I used to get inundated with CVs. A worrying trend had developed whereby we'd all be standing at the till in clean shirts and ties and a 22 year old with a proto beard and jeans that smelled of wee would shamble up to the counter and hand in a CV. On closer inspection this document would reveal his extensive experience as a waiter/barman; it would refer to his MA or PhD thesis; and list, amongst other interests "travelling" whilst neglecting to mention books or reading once. Not only that but I was left to ascertain for myself, using the divination properties inherent in Gardner's discount structure, what sort of job he actually wanted. Full time, part time, Xmas temp.

Anyway, rather than file these things in the bin, I dutifully kept them and never sifted through to throw out the really old ones. So now, even though the writers of these awful documents have succeeded in irritiating the tits off me, I feel compelled to protect their personal data for them. I hate being me.

The complaints are in many ways worse. At least the CV writers believe that they may be of service to you wheras the complainers are all of this ilk:

"I arrived at the David Attenborough signing at the advertised time only to find a queue of people stretching right around the block. What is the point of me arriving puntually if you then expect me to wait in a queue? I run the largest firm of solicitors in the city and I have never been treated so poorly. Kindly send me £50 of book tokens forthwith or I shall come in on Saturday and make all of your weekend staff cry with my shouting."

I comfort myself by imagining that I am feeding their gonads through the shredder.

More on the whole closure thing later. I need some distance so I can write without weeping like a footballer who's been ever-so-slightly brushed against by another footballer.

Young "Bookseller" of the Year

I was fascinated to read, today, of the nominations for the Young Bookseller of the Year Award. It seems to me that these nominations encapsulate much of what is wrong with bookselling today.

First, let me say that I do not know any of the people involved and I'm sure that all of them are interesting, care about books and do an excellent job for the companies they work for.

They are not, however, booksellers and this is what troubles me.

Booksellers are the people who actually sell books, face to face, to real readers. They are the folk who man the tills and run sections in bookshops. The more committed of them actually own the shops in which they work. These are the people at the sharp end of the trade and I'd argue that they are the people to whom we all owe our livings.

The problem, for me, is that bookselling and publishing seem to treat booksellers with a steadily diminishing regard. In the chains they are robbed of influence, stimulation and experience by an increasing tendency to centralise. And as the chains drive to de-skill them the publishers give up talking to them.

It's interesting the all three nominees for this award are buyers. Buyers, of course, are now the people that matter because rather than buying for individual shops they are buying for hundreds. It's not an easy job, I'm sure, but, at one remove from the front line, it's made harder by the absence of customers in the day-to-day working environment.

Back when I were a lad we bought the stock for the shop in the shop. Nothing was scaled out from bleak, over-airconditioned Head Offices. This meant that if we screwed up we either had to look at our errors piled, not selling, on tables every single day until we could return it; or we had to endure the scorn of customers when we didn't have the latest title to tickle the zeitgeist until we managed to secure stock. If you never see the stock and you never see the customers how do you approach your job with any humility. A spreadsheet showing that you have 1,000 more copies than you need does not equate to the 50 useless books you have to work around in store for the next three months. It's too abstract and the lessons it teaches are not sufficiently painful to be of any use.

There are, of course, economies of scale that are used to excuse central buying but they do not take into account (how can they?) that reading is an intensely individual experience. Those of us who read a lot are the key customers of all bookshops and we want variety and we want bookshops run by well informed staff who love books as much as we do. An industry who ignores those people does not deserve to succeed.

I expect the three nominees used to work in bookshops at the beginning of their careers but the route up and out seems to be the only route to be encouraged nowadays. At least if you want to be "someone". Who wants to stay serving customers and working at weekends when you can slowly desiccate in front of a PC talking only to people from publishers who also never see real readers because they done away with all of their reps.

I was going to draw this to a sensible and succinct conclusion but I can't. I'm just too pissed off. Bookselling as it stands is rubbish. Readers don't get what they want and booksellers are not employed, anymore, to do all the jobs they are capable of because some MBA Monkey wants to control everything. If we are losing out to the internet and the supermarkets it's because we stopped doing what we were good at and started to be "retailers". The end is in sight and we will get what we deserve for allowing this to happen.