The boss of WH Smith has said the retailer won’t be opening any more UK High Street stores. Instead it will focus on UK airports and train stations, as well as opening shops in the US and Europe, its chief executive Carl Cowling told the BBC. “We’ve got a very healthy High Street business in the UK. But we’ve got no ambitions to grow that,” he said.
WH Smith has about 550 UK High Street stores and opening more “would just be a duplication”, he told the BBC.
“When you look at the main cities across England, Wales and Scotland, we are present in those cities,” Mr Cowling said.
Consumer group Which? twice ranked WHSmith among the UK’s worst High Street retailers in 2018 and 2019 after some customers complained about “messy” shops. A spoof Twitter account also mocked the state of its carpets.
But WH Smith insists that it will continue to invest in its stores, with Mr Cowling pointing to a retail partnership with Toys R Us in nine UK High Street shops.
Over the past 20 years, WH Smith has expanded its presence in airports, train stations, motorway service areas and US-based casino resorts. Mr Cowling told the BBC World Service Marketplace Morning Report that WH Smith’s biggest growth market is the US. It has captured about 12% of the retail market in US airports, he added.
“Our ambition is to get to 20% over the course of the next four years and then that will mean probably only the best parts of 150 stores,” he said. He added that WH Smith will spend about £120m this year opening shops in the US and Europe.
“So in the first half of this year, we opened 30 shops in North America and opened another 30 shops in the second half of this year,” he said. “We’ve got a pipeline of 60 stores to open and we’re constantly winning tenders in airports.”
Kate Hardcastle, chief executive of retail insights agency, Insight with Passion, said airports and service stations represented a “golden opportunity” for WH Smith, which has been “dwindling” on the British High Street.
She said: “As more of us now travel with technology we are all the more likely to forget essentials, all much more of a selling opportunity than the odd bottle of water.” She added: “A retailer like WH Smith is going to see the value in investing and building a new captive airport audience than a challenged High Street”.
In 2019, WH Smith bought Marshall Retail Group, a travel retailer that opens specific stores and brands in airports. It also acquired InMotion, a travel retailer which sells tech products, in 2018.
“We run the Hugo Boss store, we’ve got Kiehl’s there, we’ve got InMotion, our own tech accessory stores, and we’ve got books and all sorts of souvenirs. So we bring that all together under one brand,” said Mr Cowling.
Last year, WH Smith partnered with Amazon to open a walk-out technology store in LaGuardia Airport in New York City.
The company is expanding further in Europe, after opening five new stores at Brussels Airport and another five at Oslo airports, where it is selling hot dogs. “We’re selling hot food in WH Smith stores so that’s very interesting,” he said.
In 2022, WH Smith reported £63m in profit-before-tax.
Mr Cowling said the rise in interest rates has increased the costs of the company’s investments, since the cost of borrowing is now higher.
“It’s something we have to think about because we bought two businesses in the US and and of course we have debt in the purchase of those businesses,” he said. “But our business has come out of the pandemic in a good place. We’re very cash generative, and we haven’t got a ceiling on our investments at the moment.”