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May 29, 2010 3:00 am
Foyles, the owner of the famous bookshop on London's Charing Cross Road, will move into profit this year and is expanding at the very moment when its high street competitors are struggling to carve out a role for themselves between the discounting supermarkets and online booksellers.
By focusing on the book-buying experience the family-owned chain is attracting customers looking for a large range and recommendations from staff and is increasing sales without resorting to multi-buy promotions.
"I disbanded any centralisation so we're more a number of specialist bookshops under one roof," said Sam Husain, chief executive since 2007. "People bemoan the fact that there are no longer lots of specialist bookshops along Charing Cross Road but here you have them and each has their own manager."
Mr Husain is using the retailer's reputation for eccentricity to enhance the experience - after jettisoning the quirks.
"Christina Foyle [the owner and manager until 1999] had some strange policies, like with cash you had this archaic ticketing system where you had to queue three times, and she never employed anyone for over a year so there was no continuity," said Mr Husain, who is the first chief executive from outside the Foyle family.
The books are now displayed by conventional categories, rather than organised by publisher, and the specialist shop assistants are better paid.
At Christmas, like-for-like sales rose 19 per cent and in the financial year ending in June 2010 Foyles forecasts its first net profit under the new management. Last year sales totalled £22.6m.
It is not known when the chain last made a profit because from the 1970s until 1999, when Christina's nephew Christopher took over, auditors queried the accounting systems.
Waterstone's, Foyles' much larger rival, also sees enhancing the customer's browsing experience as the key to beefing up margins. In March it launched a similar strategy to let staff help choose stock in an attempt to turn round the flagging business.
"Dominic Myers [managing director of Waterstone's] is saying the right things but it's not easy to implement. It will be a challenge at their distribution hub," said Mr Husain who thinks it will be hard to supply a large range to a chain of Waterstone's size.
Even though Foyles is expanding, Mr Husain is cautious because he thinks one of his rivals' main burdens is their large retail estate, often on upward-only rental agreements.
The book retailer has opened two new London branches, at St Pancras station and Westfield shopping centre, in the past two years and is looking at opening in other large cities. Foyles' size means it can focus on its core customer base, the educated middle class who demand a large range and can afford to pay for it.
The value of the book market last year fell 1.2 per cent to £1.75bn, according to research by Nielsen Bookscan.
But some of the categories that Foyles specialises in are growing, including books for children and young adults which grew 4.5 per cent, and specialist non-fiction which rose 3.8 per cent.
In spite of emphasising the importance of browsing the shelves, Foyles does sell books online. But apart from their e-book store, Mr Husain sees the website as mainly a "promotional tool" to direct people to the leisurely experience of the store.
Founders pioneered novel way to shift titles
In 1903 William and Gilbert Foyle failed their civil service exams and had little use for the textbooks that had served them so badly, writes Hannah Kuchler.
When they put them up for sale floods of people responded to the advertisement and, with the over-enthusiasm of teenage boys, they decided to set up what they promised would be "The World's Greatest Bookshop" in an unassuming corner of Peckham, in south London. Pioneering the discounting that now dominates the industry, Foyles posters asked: "Why pay full price for novels?" But range and personalised service were also important and by 1929 Foyles had opened its five-storey flagship store on Charing Cross Road, as well as overseas stores from India to South Africa. The empire declined under William Foyles' daughter, Christina, whose frustration with the 1960s hippies who wanted to work in the shop led to her refusing staff contracts. Her reluctance to embrace technology meant that it was not until after she died in 1999 that Foyles got its first computerised tills. After her death her nephew embarked on a programme to turn the shop - which one disgruntled customer remarked must have been run by Kafka - into a modern, profitable, bookselling chain.
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