Retailer on target for 15 new UK stores as total revenue rises 41% despite High Street issues
Adding 15 new UK stores is WHSmith’s target for this year as the 230-year-old greeting card, stationery and convenience retailer posted its latest trading update.
With 150 openings expected across 16 countries, WHS’ shops in airports and railway stations have benefited from a rebound in global travellers, with total revenue up 41% in the 20 weeks to 14 January, compared to a year ago.
In the update released on Wednesday, 18 January, group chief executive Carl Cowling said it has made a “strong start” to the financial year, as its strategy to transform the customer offer “continues at pace through broadening our categories and expanding our ranges” and he added: “It is underpinned by a forensic approach to retail.
“Our recently-opened stores in the UK are trading ahead of our initial expectations and we have received excellent feedback from customers and landlords. We see significant scope to grow the brand globally.
“We continue to make good progress with our store opening programme and, in the year to date, we have opened over 40 new stores. We have also won significant tenders at Reagan National airport in Washington and Palm Springs airport in the US, as well as a further three InMotion stores in Italy at Rome Fiumicino airport. This takes the total number of stores we have won and yet to open to over 130.
“The group is in its strongest-ever position as a global travel retailer. This strength, combined with the ongoing improvement in passenger numbers across the globe, means that we are confident of another year of significant growth in 2023.”
The update stated: “In the UK, we are on track to open 15 stores in the year across all channels,” and added that it continues to see “improving passenger numbers across UK air, strong performance in hospitals, and rail performing well”.
The figures show the High Street arm saw revenue down by 2% compared with the same period last year and 14% lower than 2019, however, the UK Travel side saw a 70% rise on 12 months’ ago and, with North America (31% up) and the rest of the world (198% up) added it, overall Travel had a 77% rise and was 48% higher on a like-for-like basis.
The statement added that High Street LFL revenue was “flat on the prior year in line with our expectations” but, through the peak period, the company “maintained good stock availability and we exited Christmas with a clean stock position”, while the cost savings target for the full year is on track.
WHS employs 14,000 staff, with about 550 travel shops in the UK and around 250 overseas, as well as running over 550 High Street book and stationery shops which accounted for about a third of sales and profits in the previous full year.
As shares in the group edged up 1p, 0.06%, to £16.18, The Times reported that Zainab Atiyyah, an analyst at Third Bridge, said WHS should focus on its travel business, claiming its UK High Street retail arm is “slowly dying” as “very few people go to the High Street to buy small value items such as stationery anymore”.
Tash Tesseyman, a retail analyst at GlobalData, told The Times that WHS needs to re-evaluate its High Street stores because, “despite good stock availability throughout Christmas, this part of the business continues to pull down group performance”.
“To rejuvenate its High Street proposition, WH Smith must focus on improving the look and prices of its existing ranges to compete with competitors such as The Works,” she said.
WHS will announce its 2023 interim results on Thursday, 20 April.