Book and food retailer WHSmith has reportedly turned over a loss due to the coronavirus pandemic.
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This is likely due to travel restrictions being imposed in the UK, as WHSmith is primarily a brick and mortar store, as oppose to an online one. They reported a pre-tax loss of £226m, down from a £135m profit last year, between the start of the year and August 2020.
The main fall of sales was during the first lockdown which spanned from March to June, but sales have since recovered a bit, due to the government pushing people to go out and spend money on the high street around the end of summer time.
“WH Smith’s High Street business was already facing an uphill struggle with the company heavily reliant on growth through its convenience shops dotted across the transport network,” said Susannah Streeter, an analyst at stockbroker Hargreaves Lansdown.
“But this captive market where shoppers made impulse purchases as they waited for trains and planes, or scanned a grab and go sandwich on their daily commute, all but evaporated during the pandemic.”
WHSmith chief executive Carl Cowling said the business was “resilient and agile” despite the possibility of cutting 1500 jobs, and closing many more stores.
He continued: “The actions we have taken have put us in a strong position to navigate this time of uncertainty and we are well positioned to benefit as our markets return to growth.
“In High Street, we had seen a steady recovery and we were well set up both in stores and online as we went into the second lockdown. We currently have 558 stores open.”
There are some encouraging signs the company will bounce back from this, as share prices are up by around £4 recently. But despite trading at a healthy £14 per share, you start to wonder how bad things must have gotten – because the company was trading at £26 a share in January – almost double what it is now.
