Waterstones profits fall as IT issues cause order backlog

Waterstones’ pre-tax profits in the 52 weeks to April 2023 fell to £11.2m, compared with the £53.4m in profits the business posted in 2022.

The fall in profit came despite a surge in sales from £399.9m in 2022 to £452.4m in the full year of 2023.

The books retailer said it suffered technical problems after it transitioned to a new warehouse system in 2022, which “impacted sales and resulted in the temporary elevation of operating costs and reduction in margin” as it struggled to get stock out to shops and fulfil direct-to-consumer orders.

Waterstones said it benefited from footfall and sales recovery post-pandemic as it saw “encouraging growth in London and other metropolitan areas as tourist numbers increase and workers return to the office”.

Sales recovery was also supported by Waterstones’ acquisition of Blackwell’s in August 2022, which helped to strengthen its bookshop portfolio to more than 320 stores across the British Isles and Belgium.