LONDON - WH Smith, the High Street stationer and bookseller has announced that sales were weak during the vital Christmas period. Like-for-like sales dipped by 6 percent, at the 542 stores across the UK, in the seven weeks ending January 21.
WH Smith had earlier warned about the tough trading conditions prevailing in the High Street and said that sales dip was pretty expected. But the bookseller said that profits expectations were largely unaffected since it had managed to avoid discounts.
Hence profit margins had been preserved, the group said. "The Christmas trading period was as challenging and competitive in our market as anticipated. Our strategy to focus on the bottom line has resulted in better margin performance and improved profitability," said chief executive Kate Swann, who had led the firm for the last couple of years.
"The top line improved in our travel retail business [where like-for-like sales rose by 3 per cent], and while like for like sales were down in our high street stores, this reflected the challenging environment and our commitment to drive profits rather than sell product unprofitably."
WH Smith felt that trading was tough since discount stores and online retailers like Amazon.com were providing stiff competition. Additionally, discounts from supermarkets during the festive season kept customers away.
Despite this, WH Smith resisted from following suit and did not join the pricing war. Ms Swann said that they had decided to focus on the "bottom line" so that profit margins were maintained rather than increase the sales figures. "Looking ahead, we remain cautious about consumer spending, and our plans reflect this," Ms Swann concluded. Shares in the company were up 11-3/4 pence to 414 pence in early trading on the markets.
Posted
on : Tue, 24 Jan 2006 18:35 GMT | Business News
By : Anne Philips
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