Watersones buys Foyles in bid to counter Amazon threat

Consolidation in the UK bookstore market as Waterstones tries to strengthen its position to counter the threat from Amazon. Waterstones has bought fellow book-retailer Foyles perhaps best known for their iconic Charing Cross Road shop.

According to a report in The Bookseller, "Foyles had sales £26.6m in 2017, but made a loss of £89,000. Waterstones recorded sales of £388m in the period to April 2017, reporting a profit of £18m."

Graham Watson's insight:

News of a horizontal merger in the book retailing market, with the news that Waterstones are buying Foyles. However, it isn't a merger born out of strength, it's a reflection of the changing nature of the book market and the need for traditional booksellers to fit back in the face of Amazon having lower costs.

Related issue:

The question of tax avoidance is raised in this article which highlights the fact that traditional 'bricks and mortar' bookseller want Amazon to pay more tax.

The Booksellers Association has seen the number of independent bookshops halve since the arrival of Amazon, and argues that tax advantages have given the online retailer an unfair advantage. They may well have a point, at a time when business rates are a pressing concern for many small retailers.