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WHSmith LFLs drop 6% in Q3

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Variety retailer WHSmith has seen like-for-like (LFL) sales decline six per cent in its third quarter, results released today reveal.

In the 14 weeks ended June 8th 2013, total sales fell five per cent compared with the same period last year, impacted by a poor performance across its High Street offering.

WHSmith High Street sales dropped eight per cent on a total basis and seven per cent LFL, which the retailer said “reflected the strong publishing schedule”, though experts have warned that this may be indicative of a wider problem.

Greg Bromley, Retail Consultant at analyst firm Conlumino, noted: “Although some improvements are visible at the high street stores, their poor performance in this period has once again affected the retailer.

“These declines have become as familiar to WHSmith as the regular growth in profit and, although the business has steadied, there must still be doubts as to whether it is being left with the resources to maintain this, particularly as even its traditionally more successful travel hubs suffered a four per cent drop in LFL over the period. “

WHSmith Travel also reported flat total sales, outperforming other divisions as its new store opening programme, which will see the retailer open Travel stores both in the UK and overseas, “continues to progress well.”

Last month, the retailer was voted the worst shop on the high street in a consumer survey by Which? which found its stores “messy” and “expensive” and WHSmith will be hoping to improve its standing despite the imminent departure of its CEO.

At the end of this month, Kate Swann will leave the retailer and be succeeded by High Street Managing Director Steve Clarke and, despite these disappointing results, her legacy at WHSmith will be remembered positively, said Bromley.

Pointing to the retailer’s decision to move away from entertainment to focus on higher margin goods in a bid to boost profitability, Bromley added: “As Kate Swann prepares to leave WHSmith at the end of the month, her time as CEO will be remembered as a success.

“Turning around the high street newsagent looked an impossible task, but over the last decade her careful financial management, a revision of the product selection and shrewd acquisitions have made the chain viable even as others around it fell away.

“Incoming CEO Steve Clarke has a great deal of pressure on his shoulders if he is to continue and further Swann’s success.

“The priority has to be a focus on improving high street stores, although there is still plenty of expansion potential in the travel sector, and for growth overseas.

“The challenge will be whether he can re-balance the business to address its problems and advantage of its opportunities without seeing the growth in profit go into reverse.”

Published on Thursday 13 June by Editorial Assistant

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