Sales surge 28% thanks to travel as retailer’s High Street arm ‘performs well’
High Street staple WHSmith has good news for the sector with sales surging by 28% thanks to “strong summer trading” in the full year to Thursday, 31 August.
As more people headed off on holiday, travel sales jumped 42%, according to the pre-close trading update issued this morning, 6 September, and the 230-year-old retailer expects the outcome for the year to be in line with its upgraded expectations following the third quarter trading update at the end of May.
According to analyst forecasts, WHSmith is expected to hit profit before tax of £143million for the full year, and the company’s preliminary results investor and analyst presentation for the year will be held on 9 November.
The company said its rail business had been “resilient in the face of the ongoing train drivers’ strike action, with travel like-for-likes rising 27% as UK sales increased by 30% even though the cost-of-living crisis continues to squeeze passenger spending.
The update stated: “Our High Street business has performed well and in line with expectations. Our strategy remains unchanged as we continue to focus on cost efficiencies and the return on space.”
On a like-for-like basis against 2022, High Street sales were up 1%, but down in total by 1%, giving the group total sales increase of 28%, or 18% like-for-like.
WHS ceo Carl Cowling said earlier this summer that the business has “no ambitions to grow” its High Street arm in the UK as that side is “very healthy”.
In the past year the business has opened 20 new travel stores in Britain, including eight in hospitals, with another 15 expected over the next 12 months, and there have been 43 in North America, a tender win for four at San Diego airport, 30 more outlets in the rest of the world, and more new business won including shops at Budapest and Madrid airports.
Elsewhere on the High Street, the news is not great for Wilko as the HMV rescue deal has faltered, but it was revealed yesterday, 5 September, that B&M has bought 51 stores for £13m which it will convert to its own shopfronts – PG Buzz understands IG Design Group supplies both retail groups with a significant greetings and stationery offer.
Having faced challenges from the budget retailer’s big suppliers which demanded their debt is repaid before supply lines are reopened, HMV owner Doug Putman is believed to still be in constructive dialogue with administrator PwC over a slimmed-down deal to take around 200 of Wilko’s 400 stores, although there is no certainty that an agreement will be reached.
The redundancy process kicked off last week with hundreds of roles axed at head office, distribution and support centres.
