WHSmith retail revenues decline

WHSmith announced today that their retail revenues have declined although profits are up !

Overall their sites at airports and train stations improved profits by 24% or £31m - I guess because they have no real competition and a captive audience.

Profits from high street stores rose by 14% but sales declined by 7%

So the management team are doing something right.

I remember an ex-CEO of mine was on the board of WHS - the company he was head of CEO of was where I worked as head of global strategy. I took the company through a complete strategic review which took 7 months of hard graft on a global basis. At the end of it all the main recommendations were to focus on what the company did best - ie: be the best in the niche the company operated in.

The company took that and continued to make excellent profits and as far as I remember, had double digit revenue growth. So what did this CEO take over to WHSmith ? Well, of course the same strategy.

It makes serious sense.

OK, life moves on. eg: the internet as an additional sales channel. But for many companies they just need to ensure their core business continues as a focused effort. That they don’t go and play in new areas (OK, that are really interesting than the day to day mundane efforts to earn millions in profits) but are crucial for long term success.

WHSmith appear to be continuing this even today. Nothing much has changed but I guess they have stopped messing with other opportunities and just concentrating on what everyone knows them for. Of course there are always opportunties for WHS to upsell at the checkout or get more sales per customer. They should investigate this.

But the core business appears to remain stable and steady.

Some of their products declined like crazy. For example, sales of CDs and DVDs were down 19% - that’s a big drop. For most of us we would not even think of going to whsmith.com to buy a CD - there are more obvious places. In fact, that website address is not mentioned anywhere in their stores, so maybe this is a missed opportunity.

Just looking at their site it looks complicated to do anything. Tons of images and then an “add” button. This doesn’t really say, “add to cart” just “add”. Their delivery is expensive and the site is slow. The SEO of the site is non exsistent.

But the guts of a good site are there. They just need to finish it off in an internet marketing sense.

I believe the overall strategy is sound - but they might just be a little slow in today’s technological environment.