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WHS wind down non-core activities

6 stores to close along with Cardmarket and Local initiatives as post office link strengthens

  

SIX of WHSmith’s High Street stores are to be shut, along with their Cardmarket and Local initiatives after the retailers conducted a “detailed review” into that side of their business.

The stationery, book and travel retailers founded in 1792 revealed yesterday, Thursday, October 11, that profits at their travel arm had risen seven per cent to £103million in the year ending August 31, but on the High Street there was a three per cent fall to £60m.
The preliminary results for the year show group profits before tax fell four per cent to £134mfor the year, with revenue up eight per cent for travel where recent years have seen international expansion ramped up, while in the High Street stores it fell three per cent as they have struggled against numerous challenges in the UK.
However, while the decision to focus on core categories means winding down non-core trial initiatives such as the Cardmarket budget business and WHSmith Local efforts, they have extended their relationship with Post Office Limited and signed a new agreement including franchising a further 40, bringing the total number of franchised post offices within WHSmith High Street stores to 208.
The report stated: “Subject to public consultation, we anticipate that the new post offices will open over the course of 2019 and will further confirm our position at the heart of the communities in which we operate.”
Stationery, including cards and wrap, saw like-for-like revenue up three per cent, and it remains “an attractive category”, continuing to be the main beneficiary of additional space
Group chief executive Stephen Clarke said: “Travel accounts for over half our sales and two thirds of our profits and continues to perform strongly with revenue growth of eight per cent in the year,” “this performance has been driven by our ongoing investment in stores and growth in passenger numbers.”
“We have a fast-growing international business with 286 units open across 27 countries and 50 airports. We are pleased to have won 42 new units this year including some significant tenders in South America and Europe.
“We had a good year in High Street despite the well-documented challenges. During an encouraging second half, the business traded well and we quickly identified the latest trend in the market, becoming a one-stop-shop for all Slime-related products.
“Despite this good performance, we are not ignoring the broader challenges on the UK High Street and, during the second half, we conducted a business review to ensure our High Street business is fit for purpose now and for the future.”
At the end of August the firm’s High Street arm had 607 stores, four fewer than 12 months previously, and they said the review had led to the decision to wind down Cardmarket and WHSmith Local, and close around six High Street stores, particularly those impacted by onerous leases.
Stephen added: “While there is some uncertainty in the economic environment, we are pleased with the start to the new year in both businesses, and will continue to focus on profitable growth, cash generation and new opportunities to profitably invest for the future. We are well positioned for the current year and beyond.”



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