Waterstones profits have plunged, despite an uptick in sales, after the retailer was hit by technical issues that led to a backlog of orders from bookshops.
Pre-tax profits for the book retailer plummeted to £11.2m in the 52 weeks to 29 April 2023 – less than a quarter of the £50.6m it reported the year before.
The retailer said it was hit by technical issues at its central distribution centre when implementing a new warehouse management system from Blue Yonder.
A Waterstones spokesperson said the disruption had “significant impact on both stock availability and operating costs”.
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Despite the setback, full-year sales jumped 13% to £452.5m, up from £399.8m, as “footfall and sales continue to recover post pandemic”.
Waterstones said it had benefited from the “increased popularity of both reading and physical bookshops, supported notably by social media and positive press coverage”.
The retailer noted “encouraging growth in London and other metropolitan areas as tourist numbers increase and workers return to the office”.
It added that sales growth was also supported by its acquisition of Blackwell’s in August 2022, which helped to strengthen Waterstones’ bookshop portfolio to over 320 stores across the British Isles and Belgium.
A Waterstones spokesperson said the group “will build on this growth throughout 2024, as we continue to invest in our teams, our infrastructure and our shops, both within the existing estate and with further new bookshops in the pipeline”.
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