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High Street

WH Smith to close six stores as result of ‘business review’

WH Smith has announced it will close six stores as it looks to “restructure” its high street business, including operational activities and winding down “non-core trial initiatives” including Cardmarket and WH Smith.

Despite restructuring plans WH Smith said its high street arm had delivered a “good performance despite the well documented challenges of the UK high street”. Trading profit for its stores fell by £2m on last year’s figure of £62m, however the result was one of the highest it has seen in the last 15 years, following “record years” for the past two years.

Comparable sales on the high street were also down by 3% with group pre-tax profit also declining by 4%, down to £135m. The retailer said it was “not ignoring the challenging conditions being experienced on the high street more generally”, saying that the six stores were being closed had been “impacted by onerous leases”.

WH Smith announced that it has boosted its dividend with £50m being returned to shareholders, with travel stores based at airports and train stations providing the bulk profit.

Stephen Clarke, WH Smith CEO, said: “This performance has been driven by our ongoing investment in stores and growth in passenger numbers. Profit in travel is up 7% to £103m. 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 of the UK high street. 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.”

He added: “The Board has proposed a 13% increase in the final dividend and we have today announced a further share buyback of up to £50m reflecting the Group’s cash generation and our confidence in the future prospects of the Group.

“This good performance is only possible through the hard work of all of our colleagues across the business and I am sincerely grateful for their ongoing support.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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