The nation’s most well-known newsagent and stationer, Swindon-headquartered WH Smith, is to review its store operations across both it travel and high street businesses as a result of the pandemic impact on passenger numbers and lower footfall on the UK high street
It is starting redundancy consultations which could lead to around 1,500 roles going at the retailer.
Carl Cowling, WH Smith’s Group Chief Executive, said: “Covid-19 continues to have a significant impact on the WH Smith Group. Throughout the pandemic, we have responded quickly and taken decisive actions to protect the business including substantially strengthening our financial position. We have also welcomed support from Government where available.
“In our travel business, while we are beginning to see early signs of recovery in some of our markets, the speed of recovery continues to be slow. At the same time, while there has been some progress in our high street business, it does continue to be adversely affected by low levels of footfall. As a result, we now need to take further action to reduce costs across our businesses. I regret that this will have an impact on a significant number of colleagues whose roles will be affected by these necessary actions, and we will do everything we can to support them at this challenging time.”
In April, the company assumed that Group total revenue would be down between 80 per cent and 85 per cent from April until 31 August 2020 against the same period in the previous year. As lockdown restrictions have eased around the world, it has seen a gradual recovery although sales continue to be materially down versus the prior year.
Although passenger numbers remain significantly down year on year, WH Smith has begun a phased reopening of its UK stores across at airports and on railway stations. It is now trading in 246 of its largest stores which have historically represented around 75 per cent of annual revenue.
In the US, where approximately 85 per cent of passengers are domestic, the retailer anticipates a faster recovery. Overall revenue is down 80%, although we have seen an encouraging performance from the 147 stores that we have reopened to date with sales in these stores down c.50%. Across the rest of the world WH Smith has reopened153 stores.
On the UK High Street, the 203 WH Smith stores which host Post Offices remained open through the pandemic to provide vital postal and banking services. Since June, the company has reopened its remaining High Street stores with 575 now open, though high street footfall is significantly down on 2019 levels. However, in line with many other retailers, its online businesses have continued to perform strongly.
Following the impact of Covid-19 in the second half of the financial year, the Group expects to deliver a headline loss before tax for the financial year ending 31 August 2020 of between £70 million and £75 million.