Daunt: 'Together, we will be stronger and better positioned to protect and champion the pleasures of real bookshops in the face of Amazon’s siren call'
Publishers are realistic enough to give a positive response to the shock news today that Waterstones has bought Foyles. In an ideal world, our high streets would host a vibrant mix of chains, privately owned independent chains, and independent shops. With the retail market as challenging as it is, to see Foyles find a home where its shops can remain in business, and to see our most important chain strengthened with the addition of Foyles' branches, is welcome - notwithstanding the higher discounts that Waterstones will negotiate on behalf of its new subsidiary.
Foyles has long outlived the other family-owned, small chains - among them Thornes, Austicks, Sweetens and James Thin - that were once prominent in British bookselling. But a combination of online competition and other factors - disruption in the Charing Cross Road owing to the Crossrail project, declining footfall owing to fears of terrorism, punitive rates - have made life hard. The chain made a loss of £89,000 in the year to 30 June 2017, though it had been profitable the year before.
Earlier this year, the Foyle family's Noved Investment Holdings sold the building that houses Foyles' flagship Charing Cross Road stores to Brockton Capital, for a reported £45m. Foyles had moved into the building, just down the road from its previous site, in 2014, and has held a 20-year lease since then.
Foyles also has branches in Stratford (East London), London Waterloo, the Royal Festival Hall, Bristol, Birmingham, and Chelmsford; and its sells print books (but not ebooks) online. The ceo is Paul Currie, who e arrived at the business in 2015, having previously been ceo of toy retailer Hamleys. He will leave the business when the sale is complete, as will finance director John Browne. The 2016/17 turnover was £27m.
Christopher Foyle, chairman, said: "My family and I are delighted that Foyles is entering a new chapter, one which secures the brand's future and protects its personality. I look forward to witnessing the exciting times ahead for the company founded by my grandfather and his brother 115 years ago."
For Waterstones, this appears to be a very timely purchase as the chain looks for growth following its acquisition earlier this year by hedge fund Elliott Advisers.
Andrew Franklin, founder and md of Profile Books, said: "If Foyles had to sell, they've sold to the best possible owner." He reflected a general view among publishers that md James Daunt has turned round the business by focusing on distinctive bookselling, ditching the formulaic strategy that had left its branches looking tired and unappealing.
Simon & Schuster ceo and publisher Ian Chapman took the same view: "I am sorry to see another retailer go, obviously; particularly one with the pedigree and heritage of Foyles... However, I am delighted that it has been sold to Waterstones. They will nurture and treasure Foyles; but, equally, they will get the best out of the business. It will be fascinating to see how it develops. But they are in great and safe hands, in my opinion, with James and his team."
Hachette UK ceo David Shelley struck the same theme: "At Hachette, we are huge admirers of Foyles: their support for great writing, their flair for selling books, their knowledgeable and dedicated staff and their brilliant shops which are landmarks, particularly in London, and so we are delighted that they have found a home with a company that shares all these characteristics."
Anthony Cheetham, chairman of Head of Zeus, said he was "feeling a bit sick" at the news of the takeover, describing it as "depressing but inevitable". The closure of one more retail channel meant that it was "getting harder and harder to make a living in this business. Looking back 30 years we had five or six book chains, book clubs, people paying thousands for serialisations and library sales.
"We have to recognise that books are no longer a mass market product, we has publishers have got to publish unique stuff that you can't get on Netflix or the BBC or wherever, decent scholarly work that entertains as well as informs."
At Penguin Random House, group sales director Rob Waddington said: "Foyles have remained a consistent and supportive bookselling partner of Penguin Random House over many years. We are delighted to see their distinct and trusted name continue under the stewardship of James Daunt and all of the Waterstones team."
Daunt said: "We are honoured to be entrusted with the Foyles business, and greatly look forward to joining forces with the Foyles bookselling team. Together, we will be stronger and better positioned to protect and champion the pleasures of real bookshops in the face of Amazon’s siren call.
"It is an exciting and invigorating time in bookselling as good bookshops are rediscovering their purpose in the fight back against online and e-reading. At Waterstones, we see our future as responsible stewards of shops that strive to serve their customers each according to their own distinct personality. This is nowhere more important than with those shops - Hatchards, Hodges Figgis and now Foyles - that have such singular heritages.
"The Foyles booksellers join a company that celebrates the traditional virtues of Foyles bookselling as equally as it does the illustrious history of Foyles itself. We take on this responsibility with pride and confidence and are committed to ensuring Foyles a future as bright as its past."
The purchase price was undisclosed. Completion of the transaction is expected to take place by the end of the year.