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Waterstones revealed that pre-tax profits fell to £11.2m in the year ending 29 April 2023 from £50.6m reported last year, as a technical issue led to a backlog of orders from bookshops.
Waterstones has attributed its performance to a technical issue at its central distribution, following the introduction of a new warehouse management system.
According to the retailer, this “impacted sales and resulted in the temporary elevation of operating costs and reduction in margin”.
The news comes despite the book retailer experiencing a 13% improvement in sales to £452.5m during 2023, up from £399.8m the previous year, as “footfall and sales continue to recover post pandemic”.
Waterstones sales had reportedly benefited from “the increased popularity of both reading and physical bookshops, supported notably by social media and positive press coverage”.
In addition, sales growth at the retailer was also supported by its acquisition of Blackwell’s in August 2022, which strengthened Waterstones’ bookshop portfolio to over 320 stores across the UK and Belgium.
The retailer’s operations within London and other metropolitan areas also experienced encouraging growth, as tourists increased and more workers returned to the office.
