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WHSmith PLC

WHSmith's headquarters in Swindon
Type	Public
Traded as	LSE: SMWH
Industry	Retail
Founded	London (1792; 226 years ago (1792))
Headquarters	Swindon, United Kingdom
Number of locations	1,300 (612 high street & 768 travel) (August 2016)[1]
Key people	Henry Staunton (Chairman) Stephen Clarke (CEO)
Revenue	£1,234 million (2017)[2]
Operating income	£142 million (2017)[2]
Net income	£116 million (2017)[2]
Number of employees	13,773 (2017)[2]
Website	Corporate www.whsmithplc.co.uk Consumer www.whsmith.co.uk

WHSmith PLC (also known as WHS or colloquially as Smith's, and formerly W. H. Smith & Son) is a British retailer, headquartered in Swindon, Wiltshire, which operates a chain of high street, railway station, airport, port, hospital and motorway service station shops selling books, stationery, magazines, newspapers, entertainment products and confectionary.

The company was formed by Henry Walton Smith and his wife Anna in 1792 as a news vendor in London. It remained under the ownership of the Smith family for many years and saw large-scale expansion during the 1970s as the company began to diversify into other markets. Following a rejected private equity takeover in 2004, the company began to focus on its core retail business. It was the first retail chain in the world, and was responsible for the creation of the ISBN book identifier.

WHSmith is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index. It celebrated its 225th anniversary in 2017.^[3]

History

Formation

The WHSmith logo until the early 1990s, featuring the then-familiar cube of letters, revived in the mid-2010s

In 1792, Henry Walton Smith and his wife Anna established the business as a news vendor in Little Grosvenor Street, London.^[4] After their deaths, the business—valued in 1812 at £1,280 (equivalent to £78,240 in 2016)—was taken over by their youngest son William Henry Smith, and in 1846 the firm became W. H. Smith & Son when his only son, also William Henry, became a partner.^[5] The firm took advantage of the railway boom by opening news-stands on railway stations, beginning with Euston in 1848.^[5] In 1850, the firm opened depots in Birmingham, Manchester and Liverpool.^[5] It also ran a circulating library service for a century, from 1860 to 1961.^[6][7] The younger W. H. Smith also used the success of the firm as a springboard into politics, becoming an MP in 1868^[5] and serving as a minister in several Conservative governments.^[5]

After the death of W. H. Smith the younger, his widow was created Viscountess Hambleden in her own right;^[5] their son inherited the business from his father and the Viscountcy from his mother. After the death of the second Viscount in 1928, the business was reconstituted as a limited company, in which his son, the third Viscount, owned all the ordinary shares.^[4] On the death of the third Viscount in 1948, the death duties were so severe that a public holding company had to be formed and shares sold to WHSmith staff and the public.^[4] A younger brother of the third Viscount remained chairman until 1972, but the Smith family's control slipped away, and the last family member left the board in 1996.^[4]

Horsted Keynes branch

In 1966, WHSmith originated a 9-digit code for uniquely referencing books, called Standard Book Numbering or SBN. It was adopted as international standard ISO 2108 in 1970, and was used until 1974, when it became the ISBN scheme.^[8]

Expansion

From the 1970s, WHSmith began to expand into other retail sectors. WHSmith Travel operated from 1973^[4] to 1991. The Do It All chain of DIY shops originated with an acquisition in 1979,^[4] becoming a joint venture with Boots in 1990.^[4] Boots acquired WHSmith's share in June 1996.^[4] The bookshop chain Waterstone's, founded by former WHSmith executive Tim Waterstone in 1982, was bought in 1989^[4] and sold in 1998.^[4]

In 1986, WHSmith bought a 75% controlling share of the Our Price music chain;^[4] in the 1990s it also bought other music retailers including the Virgin Group's smaller (non-Megastore) shops. The 75% share of Virgin Our Price was sold to Virgin Retail Group Ltd in July 1998 for £145m.^[4] WHSmith also owned the American record chain The Wall,^[9] which was sold to Camelot Music in 1998.^[10]

In March 1998, the company acquired John Menzies' retail outlets for £68m, which for many years were the main rival to the company's railway-station outlets. This purchase also cleared the way for WHSmith's retail expansion into Scotland. Prior to the takeover, Menzies' larger Scottish shops (carrying a very similar range of products to High Street WHSmith shops elsewhere) dominated the market, and the latter's presence was minimal.^[11]

Restructuring

For several years, the company's retail side had difficulties competing with specialist book and music chains on one side and large supermarkets on the other. This led to poor financial performance, and a takeover bid in 2004 by Permira, which fell through.^[12] It reacted to this by disposing of its overseas subsidiaries^[13] and its publishing business Hodder Headline, in order to concentrate on reforming its core businesses.^[14]

In August 2006 the company demerged the retail and news distribution arms of the business into two separate companies: WHSmith PLC (retail) and Smiths News PLC (newspaper and magazine distribution).^[15] In September 2010 WHSmith bought The Gadget Shop from The Entertainer.^[16] That year, it also bought online greeting card retailer Funky Pigeon.^[17]

Since 2011

A WHSmith owned Funky Pigeon shop at Leeds railway station

In April 2011, WHSmith agreed a deal with the legal services provider QualitySolicitors under which QualitySolicitors is to place representatives in up to 500 of its UK branches.^[18][19][20]Past Times went into administration in January 2012, and the brand name was bought by WHSmith in March 2013.^[21]

In October 2013, WHSmith announced that it had bought the ModelZone brand and will sell products under this brand through existing WHSmith shops.^[22][23][24] WHSmith subsequently announced through the ModelZone Twitter page in November 2013 that 10 shops were to carry products under the ModelZone brand name by 23 November 2013.^[25] In October 2014, WHSmith announced as part of its preliminary statement that it was planning on extending its greetings card offering by launching the value focussed brand Cardmarket on a trial basis. According to the statement, these trial shops will be in low rent areas and will be let to WHSmith under short term leases.^[26]

Late in 2017 the Company purchased Cult Pens, a UK based retailer of stationery items, for an as yet undisclosed figure.^[27]

Television

WHSmith founded one of the UK's earliest cable television channels, Lifestyle, which was carried on almost every cable system in the UK and Ireland prior to the start of Sky Television.^[4] By late 1984, the company had bought a 15% stake in Screensport and from January 1986 took over the operations and management when ABC and R Kennedy pulled out.^[28]

Operations

United Kingdom

Brentwood High Street branch

Since 2007, the company has taken on a number of Post Office branches, mainly within its high street shops.^[29] By April 2016, this had reached 107, including former Crown Post Offices, with plans for an additional 61.^[30]

WHSmith also operate a number of shops within hospitals, following its acquisition of Yorkshire-based newsagent chain United News in March 2008.^[31]

In addition to its existing joint ventures and franchise shops, the company trialed the smaller format, convenience-based WHSmith Local concept during 2013.^[32] Targeted at independent newsagents and post office business owners,^[33] a total of 40 such stores were trading and a further 40 planned by the time the 2015 annual report had been published.^[34]

Since 2011, the company has also opened shops under its Funky Pigeon brand, offering stationery and personalised greetings cards.^[35]

International

Stansted Airport branch

Canadian operations began in 1950 and continued until 1989, when they were sold to domestic owners and renamed SmithBooks. SmithBooks later merged with Coles, forming Chapters, which retained the Coles and SmithBooks names and locations while also opening new namesake superstores. Many SmithBooks locations were eventually closed or converted to Coles; a few locations still retain the name as of 2013.^[36]

WHSmith operated shops in the United States from 1985 until 2003, primarily in airports. The company acquired Australian and New Zealand subsidiaries in 2001 which were subsequently disposed of, along with those in Hong Kong International Airport (now as Page One) and in Singapore at Changi Airport, in 2004 (now Times Travel under the Times Bookstore banner).^[13]

WHSmith restarted its Australian operations in March 2011 following the collapse of Angus & Robertson/Borders who held the naming rights in Australia. The first new shop was opened at Melbourne International Airport, International Departures Terminal. There are now three outlets at Melbourne Airport, three at Southern Cross Railway Station and one within the Melbourne Central Shopping Mall.^[37]

WHSmith has opened shops in major Indian airports. WHSmith is currently in the process of planning 30 kiosk shops in China.^[38]
Currently, WHSmith sponsor the IPL cricket team (Sunrisers Hyderabad) (SRH) in India.^[39]

The company retains one shop on Rue de Rivoli in the centre of Paris, France.^[40][41] In October 2008, WHSmith, together with SSP, opened five branches within Copenhagen Airport,^[42] and in April 2009 opened a branch in Stockholm-Arlanda Airport.^[43]

In 2009, WHSmith opened two shops in Shannon Airport, County Clare, Ireland. A further three shops are operated in Dublin Airport's Terminal Two, which opened in November 2010 and 5 shops in Dublin Airport's Terminal One, which opened in 2013. The chain promised when winning this latter contract to hire a full-time Irish book buyer; however, the appointment of an Australian, based in London and not in Dublin, drew adverse criticism.^[44]

In 2013, it opened an additional four shops at Dublin Airport's Terminal 1. Eason's, currently at T1 in Dublin, asked the airport operator to tender for a new contract one year earlier as the retailer blamed a fall in sales on the success of Terminal 2 at Dublin, which carried the majority of long haul traffic and long haul passengers tend to spend more on books.^[45]

WHSmith opened four branches in Helsinki Airport, Finland in late 2016 and early 2017.^[46][47]

Controversies

On 19 June 2009, WHSmith apologised after promoting a book on cellar rapist Josef Fritzl as one of the "Top 50 Books for Dad" as a Father's Day gift.^[48][49]

In October 2012, WHSmith faced criticism from shooters after the sale of shooting magazines to children under 14 was banned, although it is legal for children under 14 to go shooting. The decision appeared to follow a campaign by animal rights activists. The British Association for Shooting and Conservation (BASC) campaigned against the ban, including a 12,000+ signature petition. In mid-November it emerged that the restrictions had been removed from all UK shooting magazines.^[50][51][52]

On 14 October 2013, WHSmith took their website offline because "unacceptable titles were appearing on their website". These were e-books with themes of abuse.^[53] The company confirmed in March 2017 that it would pass on the VAT reduction to customers spending over £6 who were travelling outside the EU.^[54]

The chain was criticised in 2014 for the condition of its shops, with both analysts and customers accusing the chain of under-investing in its estate.^[55][56]

In 2015, WHSmith and other airport retailers hit controversy when it emerged that their airport shops were charging VAT to shoppers travelling outside the European Union, claiming the VAT back from the government, but not passing the refund on to customers.^[57] In the same year, the company was also criticised for the prices charged in its branches in hospitals, after media investigations found some items to be on sale at significantly higher prices than in high street branches.^[58] In May 2018, WHSmith apologised after it was revealed that it has made more than £700 by selling single tubes of toothpaste for £7.99 through its branch in Pinderfields Hospital.^[59] The price was described as an 'error' and WHSmith promised that the proceeds from the sales would be donated to a local charity. The price was restored to £2.49, still more than three times the price of 80p charged in a nearby Tesco.^[60]

See also

• Retail Book Association


• Books in the United Kingdom

References

External links

• Corporate website


• Retail website