WH Smith’s high street sales fell 6% as the company explores selling its stores
London: WH Smith is struggling with sales at its high street stores. Just days ago, they confirmed talks to sell their 500-store chain. The company reported a 6% drop in high street sales over the 21 weeks leading to January 25, which includes the busy Christmas season.
Sales fell 3% on a like-for-like basis. This news comes as WH Smith considers focusing more on its travel operations. Their travel shops in airports and train stations are doing well, with a 6% increase in sales over the last five months.
Overall, same-store revenues rose by 3%. WH Smith mentioned that their high street division ended the Christmas season with a good stock position. They are also on track to save £11 million this year.
Carl Cowling, the CEO, said the company is off to a good start this financial year. He believes they will see strong growth in their travel business despite some economic uncertainty.
However, the high street is facing challenges. Trading has declined in recent years, prompting WH Smith to cut costs and close unprofitable stores. The recent Budget announcements are adding to their troubles, with a £20 million increase in wage costs expected.
Earlier this month, WH Smith announced plans to close 17 high street stores by 2025. They had already closed 14 stores in the last financial year. Now, the high street business only makes up about 15% of the group’s annual profit.
Private equity firms are interested in the high street division, which raises concerns for around 5,000 employees. Hilco and Alteri are reportedly looking into a potential takeover, following WH Smith’s initiation of the process late last year.
Both firms have experience in turning around UK retail businesses, which worries some staff about the future of WH Smith’s high street stores. Hobbycraft owner Modella Capital and Canadian billionaire Doug Putman, who owns HMV, are also potential bidders.
