// WHSmith seeks rent cuts from landlords a few days after it announced 1500 job cuts
// WHSmith has said its post-Covid sales are slow to recover and it still hit by low footfall
// The retailer says it is expects to post a loss of £70m-£75m
News has emerged that WHSmith is reportedly demanding rent cuts from landlords, a few days after it announced a major round of job cuts due to a slow post-Covid recovery.
According to The Sunday Times, the books and stationery retailer has drafted in property adviser Gerald Eve to negotiate deals with property owners.
The decision to demand rent cuts from landlords has reportedly angered from some property owners, with sources telling The Sunday Times that WHSmith was using the threat of a CVA to encourage landlords to agree terms, or was cutting deals on an ad-hoc basis – including payment holidays.
- 1500 job cuts on the horizon at WHSmith
- 150 office jobs at risk as WHSmith begins redundancy consultations
- WHSmith revenues drop 74% due to lockdown
WHSmith refuted the allegations, telling The Sunday Times that a CVA was not “actively being pursued” nor used as a threat.
However, a CVA was not ruled out.
Last week, WHSmith announced plans to cut 1500 out of its 14,000 jobs across its UK store operations as bosses said its recovery from the Covid-19 lockdown was “slow”.
The retailer said that the time that it had started consulting with affected staff over the plans.
The job cuts came as WHSmith sought to reduce costs after its shops in airports and railway stations – usually the star performers in its trading updates – were hit by low passenger numbers while its high street stores also suffered from low footfall.
The books and stationery chain said it reopened all 575 of its high street stores and just over half of its 580 travel shops since lockdown restrictions on non-essential retail was lifted in mid-June.
WHSmith’s overall revenue was 57 per cent lower last month compared with July 2019, with most of this loss coming from WHSmith’s travel stores.
Although travel revenue has started to recover from the peak of the pandemic and lockdown in April, when it was down 92 per cent on last year, sales were still nearly three-quarters lower in July.
Meanwhile WHSmith’s high street revenue has gone from 71 per cent down in April to 25 per cent down in July compared with the same months in 2019.
The retailer also said its loss before tax is likely to reach between £70 million and £75 million for the year ending August 31.
The full results will be announced in November.