WH Smith downsizing?
By Jim Scott
The high street has claimed several victims this year amidst a fall in sales and revenue from high street stores. In August, Poundworld went into administration with the loss of over 2,300 jobs, Dixon’s Carphone Warehouse closed 92 stores and now WH Smith has announced it will "start closing" stores, with the first to close as soon as its leases are up. But with WH Smith downsizing, could this unravel the two-century old business or could it prompt restructuring?
Originally founded in 1792 and eventually growing to 1,300 stores, almost half in travel locations such as airports and services. WH Smith was known for selling stationary, magazines, newspapers, DVD’s and pretty much anything you could get from newsagents, but all together in one store. The success of WH Smith continued to grow and acquired other chains, The Gadget Shop and FunkyPigeon.com. But now it seems a fall in sales has led to the commencement of store closures in its least profitable locations. The Daily Mirror reported over the weekend, that some stores would close as part of a company-wide restructuring.
According to the Bookseller, revenue was down £2 million and a "challenging" Christmas period in 2017 prompted the closure of six loss-making high street stores which are yet to be announced. The company has not yet said if there will be job losses, unlike Carphone Warehouse which vowed to redeploy all staff to bigger stores, from the closure of 92 branches. However, a look to the future could reveal restructuring of WH Smith could help the two-century old company survive as Proactive Investors reports its travel division is doing-well.
Rated by Which? readers as the UK’s worst high street shop, the company’s high street stores suffer bad customer service, and store standards whilst it cites many customers calling the chain "expensive". Despite this, Proactive Investors said, on October 11th, 2018 profits from WH Smith’s travel division had risen 7 percent last year as high street profit fell signalling the direction the company could choose to go down to avoid further problems.
Back in January 2017, the BBC reported WH Smith’s profits overall had been boosted by its travel shops. It attributed a growth in passenger numbers helped its railway-station based branches outperform larger and "unvisited" stores across shopping centres and retail parks. Whilst it also opened 15 new "travel" stores that year, as the Bookseller explains.
A spokesperson for WH Smith said they were opening more stores than closing stores in a press release shortly after Sunday’s announcement. This could appear to sum up bosses’ visions of a "travel-store" only company.
Which, if WH Smith looks to do and keep just a handful of its 600 larger stores. They could follow in the path of ‘on the brink of collapse - The Co-Operative’ when it "ditched" larger stores in favour of smaller convenience stores to avoid going into administration altogether. The Independent reports, Co-op had been ruthless in its restructuring, selling off assets which did not make the business money whilst it vowed to maximise profits with what it had left.