Russian billionaire in £53m deal to revive book chain

Alexander Mamut, a friend of Chelsea FC owner Roman Abramovich, plans to reposition Waterstone’s as a regional and local community orientated bookseller, although he has not disclosed whether this will result in a cut in its current estate of 296 stores in the UK and Ireland. It employs 4,500 people.

Mr Mamut, who has appointed a leading independent book shop entrepreneur to run Waterstone’s, said: “The business enjoys a great loyalty from its customers and I believe that there is considerable integrity and value in the brand.”

The proposed deal, which is still subject to a number of conditions, was announced as HMV revealed a further deterioration in its trading performance.

Sales for the UK and Ireland were down 18.8 per cent in the 17 weeks to the end of April, leading to its fourth profits downgrade in as many months.

Debts have also climbed by more than expected to around £170m.

Talks with lenders over a refinancing are likely to hinge on the successful completion of the Waterstone’s sale.

Mr Mamut struck the deal through his investment from A&NN, which has interests in Moscow bookstore chain Bookberry, as well as Russian publisher Azbuka-Atticus, mobile phone handset retailer Euroset and social network site LiveJournal.

In order to rejuvenate the struggling chain, Mr Mamut said he planned to appoint James Daunt, a former investment banker. Mr Daunt currently runs Daunt Books, a small chain of highly regarded London-based bookshops he founded in 1990.

Mr Daunt’s first task will be to undertake a comprehensive review of the business and operations of Waterstone’s.

Waterstone’s saw an 11.3 per cent fall in sales over the 17 weeks to April 30 as ebooks, such as Amazon’s Kindle, continued to eat into the traditional bookstore market.

Analysts welcomed the price for the sale, but added that the refinancing for HMV would not be straight forward and that more money might be needed to bolster the retailer’s financial position.