Source: GlobalData
WH Smith has outgrown its High Street roots, says GlobalData
Posted in Retail
Following the news that WH Smith is considering the sale of its high street fascia;
Tash Van Boxel, Retail Analyst at GlobalData, a leading data and analytics company, offers her view:
“This arm of the business has consistently pulled down group revenue over the last three years, with its high street chain accounting for nearly 25% of group revenue. WH Smith’s struggles in its high street arm have come amid slow reactions to weakening demand for its core offer, with consumers turning to the likes of Home Bargains and B&M for stationery and greeting cards, unable to justify WH Smith’s higher price points.
“WH Smith’s attention on its flourishing travel division was the best course of action, but it has left its high street fascia to fall further behind. Recently, WH Smith attempted to revitalize its high street division with Toys “R” Us shop-in-shops to extend its proposition and appeal to a broader audience. It also has 195 post offices operating in its branches, and while there may be concerns about the future of this partnership, we would expect such a mutually beneficial arrangement to continue under any new owners.
“While we expect a new owner to want to continue to operate the stores under the WH Smith fascia, given its long history and the affection it is held in by consumers, it is not clear that a new buyer would continue to operate such a large store portfolio in the long term. WH Smith’s store portfolio has been well managed and has an average remaining lease length of under two years, meaning that buyers will not be committed to keep unprofitable stores open for long.”