independent publishers guild

Monday 7th December 2009

This will be the last Hub update of 2009 and I am pleased to say that we are ending on a high.

As I said last time from this point on we will be including agents in the distribution of the Hub update. We held a very useful event in Piccadilly with over 60 agents attending and provided them with an overview on progress at the site.

In this update I will cover volume and availability, peak preparations, customer and account orders and post Christmas priorities.

Availability and stock levels
We are satisfied with availability on key lines including all the promoted titles, Supertier and local bestsellers. We have a daily review across the whole estate that ensures we are focused on managing availability.

Backlist availability still has a little way to go to bring us into line with last year. We make progress every week but as the gap closes so progress slows. It is also clear that underlying availability from distributors is causing backlist availability issues. For the last few weeks we have had performance reports in a pilot system that provide us with a good insight on distributor performance, these will be ready for live operation in the new year. I think they will be a very useful source of information for building improvement plans.

Overall stock levels are higher than we had planned, which means we are very carefully managing re-order levels.

Customer order processing through the Hub is working well with Gardners continuing to support non-stocked lines.

Book Hub Operation
We are now sorting and packing up to 400,000 books a day, the site is very stable at this level and we are all very pleased with the overall operation. At the moment we are still operating a five day delivery schedule but from next week we will move to six days. We expect to ship four million books in the next two weeks.

The first pilots of the new ordering, acknowledging and EDN process through Nielsen is about to go live. This will cover electronic trading for non-EDI suppliers. Although it sounds quite dull, apologies to those who find it interesting, it will make a big difference to the speed with which we handle orders and the accuracy of supply. More on this in the new year.

Barcodes are still an issue. Rob Entwistle is currently in contact with some of you who are helping us with finalising our barcode requirement document before issuing out to all.

Special handling is under control and we are not experiencing any delays. A surge in volume as a result of a barcode issue can cause a problem but generally the team is on top of this process.

As I said in the last update we are now finalising a revised process for new titles. Details have been confirmed with the distributors and we will implement it in the new year.

Returns
The returns pilot in three stores has gone well and we have extended it to our Academic branches for more testing. It will be ready for full implementation in the new year. In the meantime the warehouse to distributor returns loop is now operational and running well.

Peak Trading Planning
We are very pleased with the way the Hub is coping with the peak volumes, today we delivered over 465,000 books to stores. Every part of the warehouse is up to date and handling the volumes well. We are putting extra capacity into the system with the move to a six day delivery this week.

We will be issuing the dues cancellation details this week in advance of last orders for Christmas, we will also notify distributors of our Christmas operating schedule.

Looking ahead
We are in a good place to look ahead and consider our priorities for the first few months of 2010.

The first significant event will be the roll out of returns processing to all stores, this will take place in January and February.

From a performance perspective our focus will be on performance and ensuring we can use the information we have to improve availability from distributors. We will also be implementing the Nielson Publisher Web Services and working with you on barcode standards.

Thank you to everyone for your support. Teams from across the industry have helped implement a huge change in the supply chain. I know it has been a very demanding period, particularly for the store teams in Waterstone’s. Everyone should be pleased with what has been achieved and how it allows us to build for the future.

Very best wishes for Christmas.

Gerry



Kind regards,
Kirsty

Kirsty Hardy
PA to Managing Director, Gerry Johnson
and Finance Director, Mike Giffin

Direct dial: 020 8996 3404
Switchboard: 020 8742 3800
Fax: 020 8996 3464
www.waterstones.com

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