Waterstones on AI, Business Strategy, and Market Position in 2024
Waterstones, a prominent bookseller, would stock AI-created books only if they are clearly labeled and there is customer demand, though CEO James Daunt does not expect AI-generated books to become common. The company uses AI technology for logistics but has kept AI-generated content out of its stores, continuing to sell books published by traditional publishers.
A Cambridge study highlighted that more than half of authors fear that AI could replace them, with two-thirds reporting that their work has been used to train AI without permission. Some authors, however, utilize AI for research or editing assistance.
Daunt emphasizes store autonomy, allowing managers to make decisions such as book displays, while the head office focuses on simplifying operations rather than micromanaging. Under his leadership, Waterstones posted a profit of £33 million on £528 million in sales in 2024, with about ten new stores opened each year. Waterstones is part of Elliott Advisers' portfolio alongside other booksellers like Foyles and Blackwell’s; notably, Daunt was also appointed as CEO of Barnes & Noble.
Speculation exists about a potential joint flotation of Waterstones and Barnes & Noble in New York or London. However, a London initial public offering is considered unlikely given current market conditions, and Barnes & Noble remains the larger company.
Recent budget changes have lowered business rates for small-site retailers while increasing rates for larger properties, measures seen as supportive of High Street businesses competing with online rivals.
A strategic decision made by Daunt in 2011 to end publishers paying for prominent displays resulted in an estimated £27 million loss in revenue, but it was instrumental in helping Waterstones return to profitability by 2016.
