W H Smith plans to open 50 stores in specially identified UK catchment areas over the next six years, with a "pragmatic" international expansion programme also planned.
The high street retailer has bought 22 former British Bookshops & Stationers shops and opened eight separate outlets in the past six months. Over the next six months, the company plans to open a further eight stores. From then on, new W H Smith-emblazoned shopfronts are forecast to crop up around the UK at a rate of seven or eight a year, the company revealed.
Stephen Clarke, managing and commercial director of W H Smith High Street, told The Bookseller: "We have identified the opportunity for 50 new high street stores to open in areas we are currently not represented—mainly in small market towns." He gave the example of Pinner, a suburb in the London borough of Harrow, where a WHS branch opened last week.
Clarke was speaking a week after WHS announced its six-monthly results in which the retailer revealed like-for-like book sales had fallen by 3% in a "soft" market.
However, the group’s pretax profit had increased by 3% to £64m. For the six months to 28th February, the group revealed its total sales had dropped 4% to £686m, with like-for-like sales falling 5%. The company’s high street stores delivered a "resilient" performance over the year, maintaining operating profit at £47m, the same as 2010, with total and like-for-like sales falling 6% to £473m. WHS’ travel sector gave a stronger performance than its high street stores, increasing operating profit by 9% to £25m, "driven by further improvement in gross margin and tight cost control". However, sales were flat at £213m and down 3% on a like-for-like basis.
Non-fiction sales increased and the business benefited from strong fiction and children’s books. Gross margin for books was also up year on year.
Clarke said: "Non-fiction was strong this year, off the back of Jamie’s 30-Minute Meals and Guinness World Records, which drove market share. Fiction was competing against Dan Brown’s The Lost Symbol the year before and teen fiction from Stephenie Meyer, but post-Christmas, Richard and Judy Book Club titles did well."
WHS also revealed it would open four more international units "shortly" and had secured a further 12 in India and Kuwait, bringing its total international outlets to 40. The company plans to expand internationally every year in a "pragmatic and low-risk way", looking to grow out of its traditional airport locations into railway stations and hospitals.
James Dilks-Hopper, analyst at Numis Securities, said WHS’ UK expansion was a good way to grow the business considering its potentially limited online market. He said: "In terms of what they [WHS] offer, it’s not as if it can be taken online easily. Most Smith’s consumers are the types to pop in and buy a book on their way past rather than go looking online."
Quercus c.e.o. Mark Smith, the publisher responsible for Stieg Larsson’s Millennium trilogy, said WHS had "importantly" supported sales with promotions. "Any high street retailer saying they are opening stores is a great thing for the industry, publishers and authors," he said. "The mix of the things it sells really works and obviously it is trying to expand on that, I think it is a great development. It is extremely important we have a means to put our titles in front of customers on a daily basis."
WHS has 581 high street stores and 532 travel units. It employs more than 17,000 people.