Daunt warns of job losses if irresponsible Brexit prevails

Waterstones boss James Daunt has sent a stark email to employees warning that if the UK leaves Europe, the retailer would be forced to axe jobs.

Thousands of booksellers, managers and head office staff at chain received the email last night (13th June), seen exclusively by The Bookseller, intended to outline the “likely” impact of a Brexit vote in the EU referendum on 23rd June.

In it Daunt warned if a Leave vote was returned, there would be a “significant retail downturn” which would “reverse much of the hard-won gain of the last few years” for the company. Waterstones’ latest results to the year ending April 2015 showed the company has significantly slashed its losses, now £1.9m in the red after tax from a deficit of £18.5m a year earlier.

“Many companies are telling their employees of the likely impact of a Brexit vote in the referendum,” Daunt wrote. “...For Waterstones, I believe it will be adverse. To borrow the assessment of Christine Lagarde (m.d of the International Monetary Fund), the impact will be pretty bad to very, very bad.

“…For Waterstones, the impact on sales will reverse much of the hard-won gain of the last few years. To survive, we will have to return to cost-cutting; return, that is, to the brutal reality of job losses and stagnant wages.”

The retail boss concluded by saying: “You may wonder why I offer no argument beyond this stark warning. The EU, after all, has much to recommend it as well as, in the opinion of many, considerable defects. My concern, however, is to be clear about the probable consequence of Brexit for Waterstones.”

In a separate interview with The Bookseller Daunt said that the IMF to every institution concerned with economic health had warned there would be a downturn if the UK left the EU, which would affect retail spending, and therefore an "out" vote was irresponsible.

Daunt's letter to employees comes after a pair of Guardian/ICM polls suggested that support for leaving the EU is strengthening, with phone and online surveys showing a six-point lead for Brexit. According to the polls published over the weekend, Leave now has a 53%-47% advantage once “don’t knows” are excluded.

As the vote nears, an open letter signed by 220 leaders in the literary world including authors Ali Smith and Max Porter has warned that withdrawing from the EU would lead to “suffering” in the creative industries and argues that remaining in the EU aids “cultural exchange”.

However, earlier this month literary agent Diane Banks argued the case for leaving the EU, saying that “crucial skills for the UK publishing industry are fluent English and technology, neither of which are most likely to be found in the EU” and that “we should prioritise immigrants with appropriate skill-sets, not those from countries which are geographically adjacent to us.”  

An online survey from The Bookseller in February found a large majority in the trade (70.6%) were against leaving the EU, with 27.1% planning to vote in favour of leaving and 2.1% undecided. Nearly half (45.9%) said leaving the EU would be “negative” for their business, but 14% said it would be “positive” or “extremely beneficial”.

The Bookseller is conducting another survey now the referendum is 10 days away. To have your say please follow this link.

James Daunt’s letter to staff in full:

“Dear all

Many companies are telling their employees of the likely impact of a Brexit vote in the referendum.

For Waterstones, I believe it will be adverse. To borrow the assessment of Christine Lagarde, the impact will be pretty bad to very, very bad.
Most informed judgement is that Brexit will provoke a period of great economic uncertainty, and a significant retail downturn in consequence .

Those who deny this are blithe in their reassurance.

For Waterstones, the impact on sales will reverse much of the hard-won gain of the last few years. To survive, we will have to return to cost-cutting; return, that is, to the brutal reality of job losses and stagnant wages.

You may wonder why I offer no argument beyond this stark warning. The EU, after all, has much to recommend it as well as, in the opinion of many, considerable defects. My concern, however, is to be clear about the probable consequence of Brexit for Waterstones."