Profits hike at WH Smith hailed

WH SmithHalf-year figures from books and stationery retailer WH Smith have been hailed a "triumph" for outgoing boss Kate Swann as she shrugged off tough high street conditions to deliver a 5% hike in profits.

In her last set of results before stepping down in the summer, Ms Swann announced pre-tax profits of £69 million for the six months to February 28 as her strategy to prioritise profits over sales growth continued to pay off.
Trading profits in the high street chain rose 2% despite a 5% fall in like-for-like sales, while its stores based in travel sites such as airports, train stations and motorway service areas overcame a 4% slide in comparable sales to post a 7% increase in profits.

Ms Swann, who hands over the reins in June after 10 years to Steve Clarke, managing director of the high street division, said trading conditions were expected to remain tough, but added the business was in "good shape".

It also announced another change at the top, with non-executive chairman Walker Boyd retiring on August 31, to be replaced by senior independent director Henry Staunton.

Shares lifted 5% as investors cheered another resilient performance and a 13% rise in the shareholder dividend payout.

Dan Coen, director at advisory and restructuring firm Zolfo Cooper, said: "WH Smith's results are a triumph for Kate Swann. Other retailers on the high street need to sit up and take note of the stationer's successful strategy."

WH Smith has been cutting costs across the group to buoy profits in the face of a difficult sales environment and said it was on track to save £17 million this financial year by taking action such as rolling out more efficient tills, voice-picking technology across its distribution centres and pulping returns from a books publisher to reduce transport costs.

But the group is also investing, announcing the acquisition of the Past Times brand following the gift retailer's collapse into administration last year.

WH Smith also plans to introduce another 100 Kobo concessions within its stores selling e-readers and ebooks, while it aims to further expand its international travel sites. The group, which has 621 high street stores in the UK and 643 travel sites around the world, will open 30 small kiosks in China and 20 outlets across Australia, Scandinavia, Malaysia and the Middle East.

High Street casualties
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Profits hike at WH Smith hailed

Administrators sounded the death knell for Woolworths in December 2008, leading to store closures that left 27,000 people out of work. Since its collapse former Woolworths stores have become a blight in many town centres and more than 100 of the large stores still lay vacant in January 2012.

Loyal customers didn't have go without the family favourite store for long however as it reappeared online as in 2009, after Shop Direct Home Shopping bought out the Woolworths name.

The greetings cards specialist became the latest highstreet casualty in May with 8,000 jobs on the line when it was forced it into administration. Its biggest supplier, American Greetings, then bought Clintons out of administration and put the retailer through a rebrand including a new logo and complete in-store revamps.

Its contemporary format includes new fixtures and fittings and easier to navigate stores, and will be rolled out to all 400 UK stores at the cost of £16million. Bosses aim to bring the brand back to profit within two years.

Poor sales in the run up to Christmas was the final nail in the coffin for several struggling chains, including lingerie retailer La Senza, which went bust in January 2012 with 146 shops and 2,600 staff. Kuwaiti retailer Alshaya bought part of the business, which saved 60 shops and 1,000 staff.

La Senza has been struggling in a similar way to other specialist shops such as Game and Mothercare, which have been hit by cut-price competition at supermarkets and have no alternative products to help shoulder losses.

Stricken retailer Blacks Leisure, which employed 3,600 staff across 98 Blacks stores and 208 Millets stores, went into administration in Janurary 2012 after failing to find an outright buyer.

Soon after its stores were bought by sportswear firm JD Sports in pre-pack deal - an insolvency procedure which sees a company being sold immediately after it has entered administration – which saw most of Blacks' £36 million of debt wiped out.

Fashion chain Bonmarche, which was part of the Peacock Group, was sold in January when the group collapsed due to unsustainable debts, resulting in 1,400 job losses and 160 store closures. Private equity firm Sun European Partners bought 230 stores, which continue to trade with 2,400 staff.

Peacocks collapsed under a £740 million net debt mountain in January 2012 in the biggest retail failure since Woolworths. Despite being sold out of administration to Edinburgh Woollen Mill in a deal that saved 380 stores and 6,000 jobs, administrators from KPMG were forced to close 224 stores with immediate effect. This lead to 3,350 redundancies from stores and Peacocks head office in Cardiff.

The high street name continues trading as bosses work to stabilise the situation, yet a further blow was dealt this month with news that the firm's pension fund is in £15.8 million shortfall as a result of the collapse.

Game buckled under its £85m debt pile in March 2012 and was placed into administration after being unable to pay a £21m rent bill. Administrator PwC immediately closed 277 shops, with the loss of 2,000 jobs. Soon after, investment firm, OpCapita bought 333 Game stores, saving more than 3,000 jobs.

Game's demise followed a string of profit warnings and the failure of nervous suppliers, including leading names Electronic Arts and Nintendo, to go on providing the latest games, further damaging poor sales.


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