Covid-19: WHSmith expects £70m loss and plans 1,500 job cuts

Books, stationery, and general merchandise retailer WHSmith has announced that it is restructuring its UK store operations, with up to 1,500 jobs set to be cut.

Releasing an unscheduled trading statement as a result of the “evolving situation regarding Covid-19”, the retailer said it is embarking on a significant review of both its travel and high-street business. Passenger numbers have been decimated due to travel restrictions and health concerns, and there has been lower footfall on the UK high street, prompting the move.

WHSmith’s eCommerce business has performed strongly, according to today’s statement, but this division typically generates a small percentage of overall revenue.

The retailer also said it expected to report a full-year loss of between £70 million and £75 million, following the impact of coronavirus on the business in recent months.

In a trading update issued on 6 April, WHSmith said it assumed group total revenue would be down between 80% and 85% from April until 31 August 2020 compared to the same period one year before.

As lockdown restrictions have eased around the world, and stores have started to reopen after their temporary closure, there has been a gradual recovery – although the retailer said “sales continue to be materially down versus the prior year”.

In April total group revenue was down by 83%, and although there have been improvements it was still down by 57% in July.

WHSmith CEO, Carl Cowling, commented: "In our travel business, while we are beginning to see early signs of recovery in some of our markets, the speed of recovery continues to be slow.

“At the same time, while there has been some progress in our high-street business, it does continue to be adversely affected by low levels of footfall.”

He added: “We now need to take further action to reduce costs across our businesses. I regret that this will have an impact on a significant number of colleagues whose roles will be affected by these necessary actions, and we will do everything we can to support them at this challenging time.”