Flagging bookshop chain Waterstone’s. which includes a showcase branch in one of Bradford’s historic buildings, is set for a ‘dynamic’ future if a deal to sell it to a Russian billionaire goes ahead, according to its likely new boss.

Current owner, embattled retailer HMV, is selling its Waterstone’s book shop chain for £53 million to A&NN Capital Fund Management, the investment vehicle of Russian financier Alexander Mamut, subject to a number of conditions.

Mr Mamut, 51, is a friend of Roman Abramovich, the billionaire owner of Chelsea FC.

HMV, which has issued three profits warnings this year, is selling the book chain, including its branch in the former Bradford Wool Exchange, to meet conditions laid down by its lenders. Waterstone's has occupied the former wool trading building since its £2.5 million refurbishment in 1996.

Waterstone’s is the UK and Ireland’s biggest book shop chain with 296 stores and 4,500 staff, but it has seen a decline in market share as well as poor sales recently.

A&NN will appoint James Daunt as managing director of Waterstone’s once the deal completes.

Mr Daunt currently runs Daunt Books, a small chain of London-based bookshops which he founded in 1990.

He will undertake a comprehensive review of the business and operations of Waterstone’s.

Mr Mamut said: “The opportunity ahead to reposition Waterstone’s as a regional and local community-orientated bookseller is an exciting one. The business enjoys a great loyalty from its customers and I believe that there is considerable integrity and value in the brand.

“This is an important investment from A&NN, which will secure a dynamic future for the UK’s largest bookshop chain.”

The deal will only complete if HMV can renegotiate its bank facilities, though HMV said the banks were supportive of the sale. Pension trustees and the pensions regulator also have to approve.

Commentators have raised questions about the future of many HMV high street shops as the company focuses on its entertainment interests. HMV has local branches in Broadway, Bradford, and at Birstall.

HMV revealed that like-for-like sales at its UK and Ireland stores fell by 18.8 per cent in the 17 weeks to the end of April, while Waterstone’s saw a fall of 11.3 per cent over the same period.

HMV chief executive Simon Fox said A&NN would be a ‘good home’ for Waterstone’s, while the sale will reduce borrowings and enable HMV to focus on plans for transforming the firm into a broad entertainment business. Underlying profits this year will be £28.5 million, said, down from its forecast of £30 million, the fourth time this year it has lowered its profit estimates.

HMV currently has 731 HMV, Waterstone’s and Fopp stores A&NN has an interest in a Moscow book chain Bookberry, as well as Russian publisher Azbuka-Atticus, mobile phone retailer Euroset and social network site LiveJournal.

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