Book shop chain Ottakar's unveiled a management reshuffle yesterday as it fought back against growing competition and slowing sales.
Ottakar's acknowledged the company must adapt to meet changing market conditions when it confirmed the departures of head of marketing Paul Henderson and two other directors.
It comes after Ottakar's failed to meet its own expectations for the Christmas trading period with full-year sales set to fall £2.5 million short of hopes.
Ottakar's added that it was scaling back the development of new products after mixed results and this had led to departmental head Graham Edmonds resigning.
IT chief Richard Wakeham had also quit but will remain with the group until a successor is appointed to ensure the final part of its electronic point-of-sale systems is installed.
Managing director James Heneage said a new post of commercial director will be created to mastermind the supply chain and the terms of agreements with book publishers.
But he denied the reorganisation of the marketing department was a cost-saving exercise or that it was linked to the slowdown in sales over Christmas.
Mr Heneage said: "This is something that has been longplanned and is a sensible restructuring to make the company better focused to changing market conditions."
Analysts said the management changes underlined how vulnerable the company had become as competition in the bookselling market intensified in recent months.
Baird analyst Paul Smiddy shaved £500,000 from his predictions for profits in the 2005/2006 financial year to £8.3 million because he felt Ottakar's would suffer from instability before emerging in a stronger state.
He said: "All these changes reflect the reality that Ottakar's is having to grow up.
"It is transitioning from a cottage industry culture to one where it is facing the harsh commercial realities of competing with Waterstone's on an increasing scale."
Seymour Pierce analyst Richard Ratner said the departure of the management trio showed that problems experienced by Ottakar's in the second half of its financial year were not just an issue concerning an overrun of costs.
Last month, the company told investors that sales for the financial year to January 29 were likely to be £2.5 million below expectations.