WH Smith to close 25 stores after reporting full year loss
WH Smith has announced that it is to close 25 stores as it reported a group pre-tax loss £226 million for the year to 31 August.
The book and stationery retailer said Covid-19 has had a significant impact on trading, particularly in the second half of its financial year.
Total group revenue fell by 27% to £1.02 billion while like-for-like revenue declined by 33%.
While sales at the retailer’s high street stores dropped by 19%, shops at its travel locations were severely impacted by reduced footfall due to Covid-19, which meant sales were down 43% across the year.
Carl Cowling, WH Smith group chief executive, said: “The group delivered a strong first half performance and traded strongly prior to the outbreak of Covid-19. Since March, we have been heavily impacted by the pandemic. Despite the many challenges faced, we responded quickly and took decisive actions to protect our colleagues, customers and the business, including strengthening our financial position.
“While passenger numbers continue to be significantly impacted in the UK, our North American business, where 85% of passengers are domestic, is beginning to see some encouraging signs of recovery. In addition, we continue to open new stores in the US and win significant tenders across major US airports.
“In high street, we had seen a steady recovery and we were well set up both in stores and online as we went into the second lockdown. We currently have 558 stores open.”
WH Smith said it will be renegotiating leases on 120 stores and also has a further 300 leases due for renewal over the next three years. Depending on the negotiations with landlords and the government’s future approach to property rates, the retailer is exepecting to close around 25 high street stores in the current financial year as leases expire.
Cowling added: “We have a robust plan across all our businesses focusing on cost management and initiatives within our control which support us in the immediate term and position us well to emerge stronger as our markets recover.
“I have nothing but enormous admiration for all our colleagues across the business, be it in stores, our distribution centres or our head offices. Their support and commitment has been outstanding during this difficult period and I would like to thank every one of them for how they have responded.
“We are a resilient and agile business. The actions we have taken have put us in a strong position to navigate this time of uncertainty and we are well positioned to benefit as our markets return to growth.”
