Smith’s strategy continues to reap the rewards

In a pre-close statement yesterday, WH Smith, which operates 1,200 stores, said its focus on generating higher margins through “tight cost control” had helped to deliver a “solid performance” for the current financial year.

Analysts are forecasting a pre-tax profit of about £107m for the year to August 31.

The company is now being led by Steve Clarke, who took over from Kate Swann as chief executive on July 1. Mr Clarke was previously in charge of the high street division.

WH Smith added yesterday that its travel business had continued to expand, “winning new business in both the UK and international travel markets”.

The retailer said it had been able to deliver the stable performance despite the relatively strong publishing schedule in the second half of the previous year.

Analysts have said that the company’s books sales would likely continue to be hit by the rising popularity of e-books.

WH Smith has continued the cost-cutting drive pioneered by Ms Swann, who turned around the company’s fortunes by stripping out sales of DVDs and CDs in favour of WHSmith’s core strengths of stationery, cards, news and books.

The company has introduced several cost cutting measures, including new energy efficient tills, charging for carrier bags, and has even considered adding time clocks to in-store chillers.

WH Smith has also begun a trial franchising of its brand to independent newsagents in a bid to expand its network.

The stationer and bookseller is testing the model to see if there is potential to try it on a national basis to increase the number of stores in its network, and could be the way forward for WH Smith’s non-travel business on the high street.