LLess than three years ago, WH Smith, the chain once known for its chocolate, magazine and stationery promotions, had lost nearly two-thirds of its stock value as the pandemic damaged its core UK business.
But now the retailer is reaping dividends from a transformation that means your typical customer is more likely to buy high-end headphones, a smartphone charger or some sushi.
The group, which in August 2020 had to cut 1,500 jobs amid criticism for its lack of investment in stores, has now more than doubled profit in a year thanks to a recovery in air and rail travel, expansion abroad and the adoption of premium electronics and power ranges.
Sales at its outlets in airports, train stations and hospitals rose 75% to nearly £600m in the six months to February 28. Sales outside its established UK and US markets more than tripled to £102m over the same period. That helped the group post a pre-tax profit of £45m, up from £18m a year earlier.
Airport stores had the largest increase in sales despite a 15% decline in the number of travelers from pre-pandemic levels. Sales at train stations outside of strike days remained stable, despite a fifth fewer passengers.
However, sales in the group’s trading division fell 1% to £266m. The company said a rise in sales from brick-and-mortar stores was offset by a large decline at its online outlets, including Funky Pigeon, which benefited during the pandemic shutdowns.
Carl Cowling, the group’s chief executive, said it was persuading more shoppers to come through its doors with each visitor buying an additional item by expanding its product range.
“Three years ago we only sold sandwiches, now we have Yo Sushi and Crush premium wraps. More and more people are coming into WH Smith as they see more of the products that we sell that might surprise them,” he said.
“Now we have painkillers, deodorant and toothpaste. People come for one product and find something else they want.”
WH Smith said it expected to open 120 new outlets in the next year, half of which would be in the US and Canada.
The group said its UK travel division also had “excellent growth prospects” as sales had risen above pre-pandemic levels in the middle of the year and more people were expected to return to travel. air, although the number of train passengers was expected to remain lower than before Covid -19.
The business is also expanding InMotion, the technology retailer it has built since buying the Dixons airport chain in 2021 and which sells more expensive equipment including computers, cameras and mobile phones, as well as smaller items. It is already in Spain, Italy and Germany and will open in Sweden and Australia.
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Cowling said: “Wherever we have a WH Smith store, we believe there is an opportunity for a technology store.”
The group is also piloting a souvenir shop, curi.o.city, in Gatwick which it hopes will expand outside the UK if it proves successful.
Susannah Streeter, director of money and markets at Hargreaves Lansdown, said: “WH Smith is benefiting from a revival in travel with its outlets on much busier rail networks and airports as demand for travel and holidays has picked up.
“The pandemic hit the retailer hard, as business evaporated as people stayed at home, but now the shutters are drawn tight and business is back.”
Streeter said even widespread rail strikes appeared to have made no dent in the recovery, “with rising demand at airports offsetting the impact of rail travel delays.” He added: “The pent-up demand for travel shows in these figures, and passengers are clearly putting cash aside to enjoy books, magazines and snacks on their long-awaited leisure trips.”