Stationery retailer WH Smith is to test a new high street format as it looks for further growth after posting a nine per cent rise in annual profits today.
The chain, which has 725 travel stores and a further 604 on the high street, is planning a small number of greeting cards stores branded Cardmarket.
WH Smith said: “In contrast to our existing greeting cards offer, which is at the premium end of the market, these stores will provide customers with a value based proposition in this growing part of the market. The trial will be in relatively low rent, short term leases in non prime pitch locations.”
The company disclosed the plan as it said pre-tax profits rose nine per cent to £112m in the year to August, despite a two per cent fall in revenues to £1.2bn.
The performance reflects the group’s continued strategy of cutting costs at its high street shops and expanding its travel business.
Like-for-like sales in both parts of the group have been consistently negative since 2005 but the retailer’s policy of focusing instead on margins is admired by City analysts.
The travel division’s trading profit increased by 11 per cent to £73m with sales up four per cent compared to last year and flat on a like-for-like basis, reflecting an improvement in passenger trends.
It opened 30 new travel units in the UK during the year - taking the total to 596 - while a further 30 sites were opened overseas in the period.
Trading profit at the high street estate was up four per cent to £58m, although total sales were down by five per cent on a like-for-like basis.
Cost savings of £14m were achieved in the year and WH Smith said an additional £11m of savings have been identified over the next three years making a total of £21m, including £11m for 2014/15.
Chief executive Stephen Clarke said: “Our focus will remain on profitable growth, cash generation and investing in new opportunities that position us well for the future.”