WHS blames non-fiction for book slump
22.04.10 | Philip Jones
W H Smith has blamed “poor” non-fiction publishing for the decline in book sales over the last six months. High street sales fell 4% in the six months to 28th February, while sales at its travel outlets bucked the trend with sales up 2%–but were also down 2% on a like-for-like basis.
WHS said book like-for-like sales were down 4% but gross margin was up year on year. The retailer added: “The books market was soft during the key Christmas period, but performance varied by sub-category with the poor publishing schedule in non-fiction acting as a key driver behind the market decline.”
Total group sales were £716m, down on last year’s £731m, with like-for-like sales down 4%. Travel sales grew by 2% to £213m, down 2% on a like-for-like basis. High street sales were down 4% at £503m and down 4% on a like-for-like basis. Excluding entertainment product (music and DVDs), high street like-for-like sales were down just 1%, WHS said.
Group profit from trading operations was £70m, an increase of 4% on the prior year. The group generated profit before tax of £62m (2009: £61m), an increase of 2% on the prior year. Travel’s operating profit increased by 15% to £23m, driven by sales growth of 2% and strong gross margin growth. During the period, WHS opened 10 units in its “established channels” and made further progress with trials in international airports and UK workplaces.
The high street shops delivered what was described as a “solid performance” with an operating profit of £47m, in line with the prior year. WHS said it was continuing with its efforts to rebalance the mix of its business towards its core categories, reducing its presence in entertainment.
Kate Swann, chief executive said: “We have delivered a good performance. Both businesses have made further progress with the delivery of their distinct strategies.” She added: “Looking forward, we remain cautious about consumer spending and our plans reflect this. We are confident in the outcome for the full year.”