Waterstone's poor sales see Gerry Johnson fall on his sword

THE boss of the troubled Waterstone's chain quit abruptly yesterday after parent group HMV unveiled an 8.5 per cent slump in festive sales at its bookstore subsidiary.

Managing director Gerry Johnson fell on his sword, the victim of chronic problems at Waterstone's, to be replaced by an internal HMV candidate, 47-year-old Dominic Myers.

HMV, which is also a big music retailer, said Myers would lead a review of the business with a view to improving its digital offerings. Simon Fox, chief executive of HMV, said: "I am delighted that Dominic is taking up the role of leading Waterstone's.

"He has played an important role in the strategy to transform the group over the last three years, and I am confident that his deep knowledge of our businesses and the book industry will be crucial to improving the performance of Waterstone's."

Johnson was managing director of the bookstore group for four and a half years and is leaving the group with immediate effect. He was on a one-year rolling contract on a basic salary of 312,000.

Company sources said this contractual entitlement would be paid quarterly, and the amount adjusted should Johnson find other employment in the period.

Myers has been HMV's development director since 2007, joining the company one year before this to lead the integration of Ottakar's into Waterstone's. He was previously managing director of the book chain Blackwell.

Like-for-like sales at Waterstone's tumbled in the five weeks to 2 January. Fox said Waterstone's had "a great opportunity as the only remaining specialist bookseller on the high street.

"I am therefore confident that the changes we are making to this business will enable us to transform its performance."

Big rival bookstore chain Borders recently went into administrative receivership.

Bad weather also held back HMV's group performance in the five weeks to 2 January, Fox said. Underlying group sales dipped 1.2 per cent in the period.

Fox said Waterstone's had been hit by a weak line-up of autobiographies, a normally popular category, and by heavy discounts from the foundering Borders.

The expected changes at the book chain follow a wider transformation of HMV, which has expanded from retail into the live music and ticketing markets after facing tough competition from supermarkets and online retailers.

Like-for-like sales at HMV UK and Ireland lifted 2 per cent. The company estimated this could have been 1 per cent higher but for bad weather hitting key shopping days. Sales in the international division fell 3.7 per cent.

HMV's shares closed down 8 per cent at 84.4p.