Bookstore Waterstones has agreed to buy Foyles, its iconic smaller rival, in a bid to fend off Amazon’s expansion, it was announced today.
The deal, which is expected to be completed before the end of the year, puts an end to Foyles’ 115 years of family ownership.
Waterstones managing director James Daunt said: ‘We are honoured to be entrusted with the Foyles business, and greatly look forward to joining forces with the Foyles bookselling team.
‘Together, we will be stronger and better positioned to protect and champion the pleasures of real bookshops in the face of Amazon’s siren call.’
Iconic: Foyles flagship bookshop on Charing Cross Road, London
The companies have not yet disclosed the full terms of the deal, but the acquisition will include London bookseller Hatchards, which was founded in 1797, and booksellers Hodges Figgis, which celebrates its 250 year anniversary this year.
Foyles, which was founded in 1903 by William and Gilbert Foyle, said the decision to sell had been ‘a hard one’ but that it will protect Foyles ‘for the good of the business, its staff and its customers’.
William’s grandson’s Christopher, who took over the company 19 years ago, said: ‘My family and I are delighted that Foyles is entering a new chapter, one which secures the brand’s future and protects its personality.
‘I look forward to witnessing the exciting times ahead for the company founded by my Grandfather and his brother 115 years ago.’
Waterstones managing director James Daunt
Foyles added in a statement: ‘James Daunt […] has assured us of his desire to maintain and celebrate the Foyles name and our distinct bookselling identity.’
It said that once the sale is completed, chief executive Paul Currie and financial director John Browne will be leaving the business.
Best known for its former flagship branch in Charing Cross Road, Central London – once listed as the world’s largest bookshop with 30 miles of shelving – Foyles moved its main store a few doors along in 2014.
It also has another three shops in the capital as well as shops in Bristol, Birmingham and Chelmsford.
Foyles made a pre-tax loss of £88,800 in the 12 months to June 30, 2017 despite sales growing 6 per cent to £26.6million. At the time, the directors said heightened fears of terrorism and subsequent extra security measures meant fewer customers at its key locations.
The investors are thought to have paid as much as £250million for Waterstones from its previous owner, Russian billionaire Alexander Mamut.
M&A advisory firm Cavendish Corporate Finance said the acquisition was a ‘smart move’ that will increase Waterstones’ competitiveness.
Jonathan Buxton at Cavendish said: ‘Waterstones acquisition of Foyles is a smart move to try and counter the expansion of discounters like Amazon and capitalise on the recent rise in consumer demand for books both in store and online.
‘The deal comes at a time when demand for books has risen both in the digital sphere and, perhaps more surprisingly, for traditional physical copies, and in 2016 Waterstones returned to profit after six consecutive years of losses.’