WHSmith CEO steps down amid ‘extremely serious’ accounting errors

The CEO of WHSmith has resigned with immediate effect as the group published a report that revealed the extent of “extremely serious” accounting errors in its North America division. Following an independent review from Deloitte for FY23 to FY25, a report concluded that the division’s treatment of supplier income was not in line with the group’s accounting policy or the requirements of relevant standards.

Deloitte reported that supplier income recognition in North America had been overstated. WHSmith said it expects to record prior year adjustments as a result, and added that the overstatement is largely a timing issue rather than one of existence.

In North America, headline profits are now expected to be in the range of £5m to £15m, down from the revised expectation of around £25m announced on 21 August 2025 and previous market expectations of £55m.

Group headline pre-tax profits for FY25 are expected to be in the range of £100m-£110m.

The report said the problem had arisen against a backdrop of a target-driven performance culture and a decentralised divisional structure, coupled with limited group oversight of finance processes in North America. It also highlighted weaknesses in the composition of the finance team and “insufficient” systems, controls and review procedures for supplier income across commercial and finance functions.

Commenting on the report, Annette Court, chair of WHSmith said: “This is an extremely serious matter that has had the board’s full attention, and we sincerely apologise for the shortcomings identified. While the issues identified arose in our North America division, we recognise the importance of strengthening controls, governance and reporting procedures across the group.

“We have acted swiftly to build a comprehensive remediation plan and will reinforce the financial discipline and integrity that underpin our business moving forward.”

Following the review, Cowling offered his resignation, which the board accepted. He has stepped down as chief executive and as a director with immediate effect, but will remain employed until 28 February 2026 to help “ensure an orderly handover”.

The board has begun a comprehensive formal search process for a new CEO. Until a permanent appointment is made, Andrew Harrison, CEO of the group’s UK division, will assume the role of group CEO on an interim basis.

Cowling has led the company as group CEO since November 2019 having joined the company in 2014. 

Court said: “On behalf of the company and the board, I would like to thank Carl for his significant contribution to WHSmith over the last 11 years. Upon being appointed as group CEO in November 2019, Carl successfully navigated the company through the global pandemic and, more recently, has strategically repositioned the group as a pure-play travel retailer. We wish Carl every success in the future.

“I am pleased that Andrew has agreed to accept the position of interim CEO. Andrew will join the board with immediate effect. With the support of an external executive search firm, the board is now committed to appointing the strongest candidate to lead the next phase and guide the group’s long-term growth strategy.” 

Cowling added: “Whilst the issues identified in the Deloitte review arose in our North American division, I recognise the seriousness of this situation and as group CEO feel it is only right that I step down from my position. It has been a privilege to lead WHSmith for the past six years as CEO. 

“During this time, we have guided the company through the unprecedented challenges of the pandemic, pioneered our highly successful one-stop-shop for travel essentials, and completed the divestment of our High Street and online businesses. I would like to thank the entire team for their support, and I wish them well.”