Amazon in Waterstone's deal

Waterstone's: concentrating on its high street shops

The UK's biggest bookshop chain, Waterstone's, has farmed out its e-commerce operations to rival Amazon.co.uk.

The truth is we just want to concentrate all our efforts on the high street and campus stores

Lesley Miles, Waterstone's marketing director

The move, which is expected to cost 50 jobs, will increase Amazon's grip on the increasingly lucrative online book market.

Waterstone's will continue to have an online presence but order fulfilment and technological expertise will be provided by Amazon.

The two companies will team up to provide book reviews, recommendations and other editorial comment for a new site, waterstones.co.uk, to be launched in the autumn.

Waterstone's director of business development Peter Mitchell told the Financial Times that Waterstone's did not have "the scale of operations online to compete" with Amazon.

Christmas rush

The British book chain has about 200,000 registered online customers compared to more than 3 million on Amazon.

The new Amazon-powered site will be launched in time for the Christmas rush and promoted in Waterstone's stores.

In the meantime, Waterstone's will reduce its online division to a skeleton staff that will continue to provide editorial content for the new site.

The company is expected to close down its dedicated order fulfilment centre at Bath.

Teaming up

Waterstone's, which sells more than £400m of books a year through its stores, decided in April to concentrate on its profitable high street business and review its internet arm.

Marketing director Lesley Miles said: "The truth is we just want to concentrate all our efforts on the high street and campus stores."

Waterstone's parent company, HMV Media Group, is reportedly seeking a buyer for the chain.

Clicks and mortar

Waterstone's is the second UK brick-and-mortar retailer to cede its e-commerce business to Amazon.

Earlier this month, The Carphone Warehouse, signed up with Amazon.co.uk.

In April, Borders, the second largest book chain in the US, partnered with Amazon in a similar deal.

On Monday, AOL Time Warner announced it was investing $100m in Amazon in exchange for Amazon technology being implemented into AOL's Shopping area.

Steve Frasier, outgoing managing director of Amazon.co.uk, said the firm was keen to build its business by providing its technological expertise to other retailers.

"We do have an active interest to make that platform available to lots of different partners here and elsewhere," he said, adding that the company was free to cut similar deals with top booksellers in other countries.