BLEAK FUTURE FOR BOOKSHOPS - Two Waterstone's bookshops in Dublin - at the Jervis Centre and on Dawson Street - are to close this Sunday. The company says it will try to save the jobs of some of the 46 staff those shops employ. A trading update from the stores' parent company HMV in early January had warned of store closures. It has around 300 book shops across Ireland and Britain. Yesterday we also heard that a receiver has been appointed to The Sunday Tribune newspaper.
Ciarán Norris, of advertising firm Mindshare Ireland, says the closure of the two Waterstone's stores is due to a number of factors. These include the rise of the web - he says this effect can not be ignored and the likes of Amazon.com, which sells books at much lower rates because it does not have the costs associated with high street retail outlets, and the growing popularity of e-readers. Amazon has said that sales of its e-readers outsold sales of paperbacks over the Christmas period for the first time ever. Another factor is the weather effect with retailers throughout Ireland and the UK seeing a real struggle to achieve profits. The third factor is the impact of the supermarkets, which are selling paperbacks for the same price as a box of teabags.
Mr Norris says the number of bookshops generally will decrease over the coming years. He says that while people like the feel of them and feel comfortable in them, they are just not buying as many books there as they used to. He says stores must diversify more in order to survive. He points out that HMV - which owns Waterstone's - has moved away from just a music menu to selling games, videos and technology such as iPods.
Mr Norris also says that on the advertising front, broadcasters seem to be doing better than the newspaper industry. He says the huge television programmes like X-Factor are appealing for companies. However, newspapers are still facing difficulties and points out that the Tribune never made money in the very crowded Irish market. He says there are just too many newspapers in Ireland and they can not all be supported. He says if someone does decide to take over the Tribune, they will have to look at doing things differently. He cites the example of the London Independent, which recently launched a mini version of itself, which sells for 20 pence.
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MORNING BRIEFS - While oil prices are high and went over $101 a barrel earlier this week, traders say prices will not hit the peaks of July 2008, despite turmoil in the Middle East and the markets panic that causes. Traders and oil officials believe a worst case scenario in Egypt - a closure of the Suez Canal and the 200 mile long Sumed pipeline linking the Red Sea to the Mediterranean - would divert but not halt oil flows. And because there are enough idle tankers because of slower economies around the world than three years ago, these could meet any potential extra demand for shipping. Global oil stocks are also higher, cushioning the market against any disruption. According to the International Energy Agency, rich countries have enough stored oil to meet about 61 days of forward demand - that is near the highest its been in 10 years.
*** The sales, marketing, distribution and business support services group DCC this morning says it has achieved very strong revenue and operating profit growth in the third three months of its financial year, to the end of December. Demand at its energy division increased significantly because of the cold weather. Trading in its second largest division SerCom was strong, with the very successful launch of Microsoft Kinect. Trading in January 2011 was satisfactory it says, although relative to last year it was impacted by the milder weather conditions compared to the extremely cold January 2010. The group said it now expects an increase in operating profit for the year to 31 March 2011 of about 15% and an adjusted earnings per share increase of about 10%, both on a constant currency basis.
*** A note from Grafton Group this morning says it has appointed Gavin Slark group chief executive, taking over from Michael Chadwick who has been on the board since 1985. Michael Chadwick stay on as non-executive chairman. Mr Slark previously headed BSS Group, a British distributor to trades like the plumbing, heating and construction sectors. Executive director and chief operating officer Leo Martin will also be standing down this year.
*** On the currency markets the euro is trading at $1.3845 cents and 85.66 pence sterling.
