WH Smith has a busy summer ahead of it, as its travel division is growing and continues to offset the decline in sales on high streets.
The chain of retail stores, which sells snacks, books and stationery, claimed to be “well-positioned” as it enters its peak summer period. The three travel divisions continue to trade well and we are in an excellent position to take advantage of growth opportunities across all our markets.
The group sales of the London-listed retailer increased by 5% in the three month period ending June 1. This is a slight decrease from the 8 percent increase seen in the first six months of the year.
The travel division’s turnover grew by 8%, with a boost of 15% from the “rest” branch. The growth was lower than the first half of this year, compared to the tough comparisons.
WH Smith’s UK Travel Division said that growth has slowed down as it “annualises the strong recovery of passenger numbers in 2020”.
The group’s travel business has benefited from the transformation of its “one-stop shop for travel essentials”, which resulted in an increase in average transaction values and return.
Amazon, a cheaper online retailer that sells small-value items, continues to erode sales in the high street division of the group. Sales fell by 4 percent compared to last year while like-forlike sales were flat.
WH Smith has approximately 1,270 travel shops around the globe. It operates 506 high-street book and stationery stores.
As part of a continuing partnership with Toys R Us, the company announced plans to expand its business by opening additional Toys R Us stores within its premises. Five of the stores have already opened, and plans are in place to open 25 more by the end August.
Tash VanBoxel, retail analyst at Global Data said that the partnership could be “enough to keep the high-street arm out of negatives in the trading update”. She continued: “In fact, although WH Smith has a toy and game offer in many stores, this concession is going to help it expand, allowing WH Smith’s high street shops to attract a broader market.”
We also expect that it will encourage parents to bring their younger children into the store with them to browse Toys R Us and to pick up books and stationery.
Shares of WH Smith increased 4p or 0.35 percent to £11.47.
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