W H Smith to cull backlist in new books strategy
W H Smith plans to cull its backlist and build areas of growth such as children’s and lighter readers with a “forensic store by store focus on space management to optimise the returns from core categories.”
A W H Smith spokeswoman told The Bookseller there are plans to “selectively remove backlist books” to focus on children’s and lighter readers, highlighting that W H Smith was number one in the market for David Walliams’ Ice Monster and Fing (both published by HarperCollins) during the half year. “The books business is fairly stable and the focus is to manage space on a store by store basis, moving backlist books that don’t have a high turnover,” she said. High Street Business m.d. Carl Cowling later said W H Smith will reduce the backlist in 10 of the chain’s smaller stores as he revealed plans to refit its post office stores with a bigger emphasis on books.
The development came as W H Smith posted its interim results for the six months to 28th February 2019 and cemented plans for the retailer to adopt a “forensic store by store focus on space management to optimise the returns from core categories”. The report added its “dedicated bookshops continue to be well received, providing a specialist customer experience with a unique look and feel”.
The report added: “In High Street, our approach to the books business is to make WH Smith High Street the home for kids and educational books and lighter readers, while at the same time driving the overall net profitability of the category by improving the efficiency of our books operating model. The quality of publishing is still the biggest driver of our performance and despite a challenging Christmas period in books, we delivered some good performances from titles such as Michelle Obama’s Becoming (Viking) and, more recently, David Walliams’s Fing. Like-for-like sales were down 5% in the period with gross margin up compared to last year.”
W H Smith added it is “making good progress” with its standalone bookshops in travel locations with the firm expecting to open a new 2,000 square feet bookshop in Gatwick Airport, North Terminal in the second half of this financial year. The chain is “on track” to open around 20 new shops this year and anticipates opening around 15 new units each year over the following three years.
The report comes amid a raft of changes to the books team at W H Smith. Pete Selby will take up the newly-created role of head of books in mid-April after books director Alastair Aldous announced fiction buyer Sue Scholes and trading controller for adult books Sandra Bradley were leaving the retailer at the end of February.
The retailer reported revenues overall for the group were up 8% at £695m (2018: £643m) with group like-for-like revenue up 1%. But the £155m purchase of US travel retailer InMotion in November last year ground into its bottom line with pre-tax profit falling 21% to £65m. W H Smith saw Travel total revenue up 18% (up 8% excluding recently purchased InMotion) and up 3% on a like-for-like basis, with Travel profit up 7% to £44m (2018: £41m).
High Street total revenue was down 1% with like-for-like revenue down 2% – the second best sales performance in the past decade. The retailer said High Street profit was in line with expectations at £48m (2018: £50m). Cuts of £4m were delivered in the half “with a further £5m identified for the second half, making a total of £9m for the year, in line with plan,” said W H Smith.
Signalling confidence for the year ahead, W H Smith increased its dividend by 8% to 17.2p for the six months to the end of February.
Group chief executive Stephen Clarke said: “These results are only possible through the hard work of all of our teams across the business and I am sincerely grateful for everyone’s continued support. While there is uncertainty in the broader economic and political environment, we have made a good start to the second half of the financial year and the increase in the interim dividend by 8% reflects the Board’s confidence in the outcome for the full year.”
W H Smith reveals plans to transform post office shops with bigger focus on books
W H Smith has revealed plans to refit its post office stores with a bigger emphasis on books.
High Street Business m.d. Carl Cowling told The Bookseller the retailer is planning the first of its 40 new look post office stores in Bath in July and in smaller stores will roll out a more children’s and lighter reading offer by reducing its backlist.
As W H Smith posts its interim results for the six months to 28th February 2019, Cowling said: “In terms of books we’ve got a long history of books and we are really very proud of it. We want to build our books business, not reduce our books business.
“In larger stores we are looking at how to refit our books department to be more customer facing. In particular we are doing that with shops with post offices. We will reduce the backlist in some of our very small stores. In those stores our plan is to take the backlist and make the kids range bigger and focus on bestsellers. We are investing money and having more great new bookshops.
“With the post office, we are going to make it a lot better to shop, with a much more interesting kids area with titles that are face-on and browsable. We are going to turn it into more of a bookshop really.”
Away from the post office plans, Cowling added the retailer will have a new standalone bookshop at Gatwick Airport as its travel business drives growth.
“The UK travel business is going from strength to strength. We are in the process of refitting a number of airport stores, the really exciting things for books is Gatwick Airport North. We are having a pharmacy and a big separate piece of space for a standalone bookshop that will be opening at the end of the summer.”
Reflecting on the interim results which saw High Street total revenue down 1%, the second best sales performance in the past decade, Cowling said: “We think we’ve got a really good and clear strategy with books. We know we are good with kids and there’s mileage there to make the books department not just nicer looking but bigger.”