guardian.co.uk  Apr 13  Comment 
Retailer reports strong demand for grown-up activity books as nation reaches for felt tip pens and pencils as antidote to stress The word extreme is usually attached to pastimes such as snowboarding and base jumping but hold on to your felt tips,...
guardian.co.uk  Apr 13  Comment 
Communications Workers Union says move is ‘blatant back-door privatisation’ of the main crown post offices The Post Office is facing criticism after agreeing to hand over up to 61 more branches to WH Smith in a 10-year deal. The...
guardian.co.uk  Apr 13  Comment 
Branches have benefited from the craze for what it calls ‘colour therapy’ and ‘extreme dot-to-dot’ books for adults The continuing craze for adult activity books, including extreme dot-to-dot and “querkles”, and strong high street...
newratings.com  Apr 13  Comment 
SWINDON (dpa-AFX) - WH Smith PLC (SMWH.L) reported profit before tax of 80 million pounds for the six months ended 29 February 2016 compared to 72 million pounds, previous year. Profit for the period increased to 66 million pounds from 60 million...
guardian.co.uk  Jan 20  Comment 
On a day when the FTSE entered a bear market, WH Smith credited the craze for adult colouring books with boosting its festive sales Continue reading...
guardian.co.uk  Jan 20  Comment 
Demand for books helps drive sales up 2% over Christmas, the first such rise in its high street figures in more than 12 years WH Smith’s profits are growing faster than expected after the craze for adult colouring books helped increase sales at...
Financial Times  Jan 20  Comment 
newratings.com  Jan 20  Comment 
SWINDON (dpa-AFX) - WH Smith plc. (SMWH.L), in its trading update, said that its like-for-like Group revenue was up 2% and Group revenue was up 4% for 20 weeks ended 16 January 2016. As a result of the strong sales performance in High Street...
Financial Times  Dec 7  Comment 
High St chain pays out for halt to 13 years of declining sales
Times Online  Nov 19  Comment 
WH Smith, in 1980s and 1990s Wolverhampton, was a sanctuary of (relative) sophistication. The shelves in the town centre branch...
guardian.co.uk  Oct 15  Comment 
Retail group arrests years of decline with 1% sales rise after opening cut-price card stores and capitalising on the trend for adult colouring books WH Smith is to step further into the discount market after the books and stationery retailer...


WH Smith (LON:SMWH) is a London retailer of books and magazines. The company also sells newspapers, impulse items, and entertainment items in its stores. WH Smith has two business segments: the travel division, which are small shops located for customers who want to purchase items on-the-go, and the High Street division, which are the large retail stores located on popular streets. The latter includes sales of the online retail site at www.whsmith.co.uk. [1]

WH Smith's main source of revenue is from the sales from its High Street division (69.5% of total revenue), which is impacted by overall consumer spending, as well as challenges such as online retail and a shift away from print. [2] In FY2008, segment revenues were $1,710 million [3] of total revenues of $2,462 million. [4]

The travel division has traditionally been a smaller portion of the company, but has recently expanded through several acquisitions in the past few years. The largest of these was the acquisition of UNS Group in March 2008 for $37 million, which added stores in UNS's hospitals. [5]

Corporate Overview

WH Smith operates in the United Kingdom and over the internet. [1] The company is a retailer primarily of magazines and books. It currently operates 449 Travel units and 557 High Street stores. Travel units are located in airports, railways, hospitals, and motor stations, catering to people on the go, while High Street stores are more traditional commercial storefronts in urban areas.[1]

Business and Financial Metrics

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Total revenues and earnings growth slowed down in 2009 due to the bad economy. [4]

In FY 2008, WH Smith had total revenue of $2,462 million, an increase of 4.1% from the previous year. Total EBIT was $138 million, an increase of 5.6% from the previous year. [4] The company was able to maintain its EBITDA margin, amidst the recession.

WH Smith (in $millions) 2006 [6] 2007 [4] 2008 [4]
Total Revenues 2549 2619 2462
EBIT 105 133 138
EBITDA margin 8% 8.5% 8.5%

Note: Currency exchange rates used for 2006 is 1.902 USD/GBP, 2007 is 2.016 USD/GBP, and 2008 is 1.821 USD/GBP. [7]

Business Segments

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WH Smith 2008 revenue broken down by segment. [8]

WHSmith High Street (69.5% of Total Revenue)

WH Smith has 557 High Street stores, which are comparable to stores of the American Barnes & Noble. Each store offers four types of products: news and impulse (includes newspapers, magazines, confectionery, etc.), stationary (greeting cards, etc.), books, and entertainment (video games, music, and etc.). High Street also operates the online retail business, www.whsmith.co.uk. The site averages approximately 250,000 visits per month. [2] Out of shopping websites, WH Smith is ranked 488 for the most website traffic. [9]

UK Top 5 Book Sites (Excluding Amazon) Market Share [9]
WH Smith 7.78%
Waterstones 6.18%
Abesbook UK 5.41%
Ebay UK 4.65%
Abesbook US 3.92%

In FY 2008, WH Smith High Street reported $1,710 million in revenue, a decrease of 2% from the previous year. The decline can be partly attributed to the strategy implemented in 2008 to focus on its core and high margin items of book sales and news and impulse sales. Thus, the entertainment sales declined 18% over the fiscal year. [10]

WHSmith Travel (30.5% of Total Revenue)

WH Smith owns 449 stores in airports, train stations, motor stations, and hospitals. [3] The selection of products offered in each store is comparatively limited in variety. Since the customers have less time to browse, these stores offer reading materials suitable for a trip and quick food and confectionery items. [3]

In FY 2008, WH Smith Travel reported $752 million in revenue, an increase of 22% from the previous year. The growth can be attributed to the major expansion for Travel. The company acquired UNS Group Limited for $37 million, which the business composed of 72 retail stores and 8 Caffe Nuovo coffee shops in 62 hospitals. The company also acquired Alpha Retail UK Limited, which the business is composed of 23 airport units. Furthermore, the company reached a franchise agreement with RoadChef to open 29 CTN units, which will enhance coverage for motorway. [11]

Trends and Forces

EBooks and Digital Readers cut into book profits

The current trend of decline in print sales are attributed not only to the weakening economy, but also the penetration of online retail. Online retailers such as Amazon offer the same products, including CDs, books, and DVDs, in addition to digital copies for some items. WH Smith has tried to capitalize on this penetration by launching its online retail site in 2001. [12]

In 2004, the large book retailers accounted for 38.6% of print sales while internet sales accounted for 6.6%. In 2008, the internet sales increased its market share to 13.4%, while large book retailers' market share fell to 34.0%. [13] Thus, internet sales have almost doubled its market share in 4 years.

Furthermore, with the advent of digital readers such as Amazon's Kindle 2, which can store over 1,500 books and access an e-store wirelessly with over 200,000 titles, WH Smith's print retail sales face a new competitor. The results can be seen from the weak retail environment, where WH Smith reported a decline in revenue, while Amazon reported a 7% gain on its books, music, and movies segment in Q1 2009.[14] Furthermore, online ebook sales reported a 54% increase from the 4QFY2008 to 1QFY2009. [15]

Bestsellers Drive Traffic to the Stores

Retail printed book sales are driven by the best sellers. Harry Potter and the Deathly Hallows was released in the first half of FY2008. A portion of the 27% increase in revenue from the second half of FY2007 to first half of FY2008 can be attributed to the Harry Potter and the Deathly Hallows book sales. [16] Thus, the large fluctuations in revenues from quarter to quarter for the retailer can be attributed to the release of different best sellers and seasonal promotions.

Whvoeer wrote this, you know how to make a good article.


  1. 1.0 1.1 1.2 WH Smith Annual Report 2008 pg. 7
  2. 2.0 2.1 WH Smith Annual Report 2008 pg. 12
  3. 3.0 3.1 3.2 WH Smith Annual Report 2008 pg. 8
  4. 4.0 4.1 4.2 4.3 4.4 WH Smith Annual Report 2008 pg. 46
  5. Bloomberg "WH Smith Sales Decline as U.K. Shoppers Curb Spending" 5 June 2008
  6. Reuters SWMH.L
  7. Capital IQ
  8. WH Smith Annual Report 2008 pg. 15
  9. 9.0 9.1 Booksellers UK Industry Report
  10. WH Smith Annual Report 2008 pg. 16
  11. WH Smith Annual Report 2008 pg. 10
  12. The Register "WH Smith jumps on ebook" 5 May 2001
  13. Booksellers UK Retail Report
  14. Reuters "Amazon beats Q1 sales, profit estimates, shares up" 23 April 2009
  15. IDPF Industry Statistics
  16. Reuters SMWH.L
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