Newsagent WH Smith (SMWH.L) has announced plans to close another 25 shops after slumping to a £280m loss.
WH Smith on Thursday said it expected to not renew the leases on 25 High Street stores across the country over the coming year as part of efforts to cut costs. The retailer operates over 500 shops across the UK and closed eight stores last year.
“While this is not an easy decision to make for our colleagues or the communities we serve, it is vital we retain a strong and cash generative high street portfolio going forward,” the company said.
WH Smith began a review of its store estate in August after suffering a large slump in sales due to the COVID-19 pandemic. The retailer said at the time it would also cut around 1,500 jobs, equivalent to just over 10% of its workforce.
News of the 25 likely store closures came as WH Smith said it had endured a “challenging” year. The company fell to a pre-tax loss of £280m ($366m) in the 12 months to the end of August, compared with £135m profit a year earlier. The business also took a £21m charge linked to the redundancies and restructuring announced in August.
Revenue across the company fell 27% to £1bn and was down 32% at its travel business as lockdowns crushed business. Revenue at its airport and train station shops was down over 90% in April at the height of the pandemic’s first wave.
“Since March, we have been heavily impacted by the pandemic,” chief executive Carl Cowling said in a statement.
“While passenger numbers continue to be significantly impacted in the UK, our North American business, where 85% of passengers are domestic, is beginning to see some encouraging signs of recovery.”
WH Smith said the second lockdown in England — its core market — would inevitably have a negative effect on its business. The company estimates it will burn through £20m in cash during November.
“We have a robust plan across all our businesses focusing on cost management and initiatives within our control which support us in the immediate term and position us well to emerge stronger as our markets recover,” Cowling said.