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HMV puts Waterstone's up for sale
Troubled retailer HMV denies it is in takeover talks but confirms it may sell book chain and Canadian operation

HMV Group has put the Waterstone's chain of booksellers on the block as the highstreet retailer fights for its survival.

HMV confirmed on Friday that it was looking at slimming down by offloading the chain and its Canadian arm, but insisted that it was not in talks about selling the entire group. Plans to close 20 Waterstone's shops and almost one in 10 of its high street music stores remain intact, however.

The Russian oligarch Alexander Mamut, a major shareholder, is thought to be one of the bidders for Waterstone's. Mamut has assembled a 6.1% stake in HMV, despite the retailer's troubles, and has appointed Credit Suisse to advise him on a possible deal. There has been speculation that he could be preparing a joint bid with Tim Waterstone, the entrepreneur turned novelist who founded the bookshop in 1982. Waterstone previously teamed up with Mamut to invest in Bookberry, a now bankrupt Russian bookstore chain.

A sale of Waterstone's could bring in about £75m, which could be used to pay down HMV's debt pile of £130m. As recently as January, HMV's chief executive Simon Fox denied that any part of the business was for sale, saying "the turnaround is on track" at Waterstone's.

"It is rather painful to recall that today is the anniversary of the bullish HMV Strategy Day last year," said Nick Bubb, a retail analyst a Arden Partners. "We remember getting frightfully excited about the margin recovery target at Waterstone's and the profit projections for HMV Live and ticketing synergies, but we don't recall HMV forecasting a 15% fall in like-for-like sales in the HMV core business over the last twelve months. Alas, group pretax profit halved in 2010/2011 to £39m and we expect it to halve again in 2011/2012."

For the full article

The Guardian