WH Smith may close stores and cut 1,500 jobs after coronavirus profit loss
Businesses from every category have been hit by the coronavirus - from hospitality to travel and retail.
Following in the footsteps of Boots, Currys PC World and HSBC, high street chain WH Smith has announced that up to 1,500 jobs will be cut after it revealed that its recovery from the Covid-19 lockdown has been “slow”.
Why is WH Smith cutting jobs?
The retailer, which sells books, stationary and gifts, said that it was beginning to consult with staff over cost-cutting plans after its revenue was revealed to be down 57 per cent in July, compared with the same month last year.
WH Smith is expected to make a loss of between £70m and £75m for the year to August.
The majority of job losses, which account for about 11% of the WH Smith workforce, are expected to be within the group's travel shops, situated at locations like airports and train stations.
In the first month of lockdown, revenue at the retailer’s travel divisions fell 92 per cent.
Unlike other businesses, WH Smith has not yet announced any major store closures, although it is understood that some of the smaller, kiosk-style stores in bus and railway stations will close as part of the restructuring process.
What did WH Smith say?
WH Smith group chief executive Carl Cowling said that the Covid-19 virus “continues to have a significant impact” across the WH Smith group.
Cowling said: “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.”
Cowling explained that as a result of this impact, it's now time for the group to take further action to reduce costs across the business.
Cowling said: “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.”
Have WH Smith stores reopened?
Just over half of WH Smith UK travel shops have reopened, with the group stating that it “[remains] focused on increasing average transaction value in these locations”.
WH Smith has said its 575 high street stores are now open, however, footfall is “significantly down” compared to 2019 figures.
It also confirmed 246 of its largest travel division sites (those in airports, railway stations and hospitals) are now open.
Throughout the pandemic, WH Smith kept open 203 of its high street stores that host Post Offices in order to provide postal and banking services to local communities.
“Given we kept these stores open in these locations, we were well advanced with our reopening plans for the stores that have temporarily closed,” a statement from the retailer said.
WH Smith said that the online businesses “have continued to perform strongly”.