UK bookstore chain Waterstones has posted its first profit in seven years.
The return from the red comes after the company reviewed its network, closing six stores and opening seven. It has invested £9 million over the last year (on top of £8.3 million in 2015) to refurbish stores, including opening cafes in 46 of them.
Mostafa Abd El Haleem, an analyst with GlobalData, says the cafes allowed the retailer to differentiate itself from its competitors.
The return to profit also reflects a recovery in the book market after a period when it struggled to compete with online retailers and the growth in eBooks.
“Waterstones has widened its product offering, benefiting from the growth of children’s books, seeing a 25 per cent rise in sales since 2010, with titles from Patrick Ness and Katherine Rundell performing particularly well,” says El Haleem.
“The future for Waterstones looks brighter than it has for some time. E-books no longer pose the sort of digital threat that continues to devastate physical music and video sales, as consumers spend less time on e-readers in favour of mobile phones.”
He said physical book sales continued to grow in the UK in 2016, “and we expect Waterstones to have been a key beneficiary of this”.
