WHSmith

WHSmith PLC

Type	Public
Traded as	LSE: SMWH
Industry	Retail
Founded	London (1792 (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	£1,212 million (2016)[2]
Operating income	£133 million (2016)[2]
Profit	£108 million (2016)[2]
Number of employees	14,000 (2016)[2]
Website	www.whsmithplc.co.uk

WHSmith plc (also known as WHS or colloquially as Smith's, and formerly W. H. Smith & Son) is a British retailer which operates a chain of high street, railway station, airport, port, hospital and motorway service station shops selling books, stationery, magazines, newspapers and entertainment products. Its headquarters are in Swindon, Wiltshire. Smith's is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index. It was the first chain store company in the world, and was responsible for the creation of the ISBN book catalogue system.

History

Formation

The W. H. Smith logo until the early 1990s, featuring the then-familiar cube of letters, revived in the mid-2010s

W. H. Smith signage displaying the modern blue and white design

Shop frontage

In 1792, Henry Walton Smith and his wife Anna established the business as a news vendor in Little Grosvenor Street, London.^[3] After their deaths, the business — valued in 1812 at £1,280 (equivalent to £76,886 in 2015) 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.^[4] The firm took advantage of the railway boom by opening news-stands on railway stations, beginning with Euston in 1848.^[4] In 1850, the firm opened depots in Birmingham, Manchester and Liverpool.^[4] It also ran a circulating library service for a century, from 1860 to 1961.^[5][6] The younger W. H. Smith also used the success of the firm as a springboard into politics, becoming an MP in 1868^[4] and serving as a minister in several Conservative governments.^[4]

After the death of W. H. Smith the younger, his widow was created Viscountess Hambleden in her own right;^[4] 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.^[3] 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 W. H. Smith staff and the public.^[3] 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.^[3]

ISBN catalogue invention

W. H. Smith's HQ building in Swindon

In 1966, W. H. Smith 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.^[7]

1970s expansion

From the 1970s, W. H. Smith began to expand into other retail sectors. W. H. Smith Travel operated from 1973^[3] to 1991. The Do It All chain of DIY stores originated with an acquisition in 1979,^[3] becoming a joint venture with Boots in 1990.^[3] Boots acquired Smith's share in June 1996.^[3] The bookshop chain Waterstone's, founded by former W. H. Smith executive Tim Waterstone in 1982, was bought in 1989^[3] and sold in 1998.^[3]

Ownership of music retailers

In 1986, W. H. Smith bought a 75% controlling share of the Our Price music chain;^[3] 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.^[3] WHSmith also owned the American record chain The Wall,^[8] which was sold to Camelot Music in 1998.^[9]

Takeover of John Menzies

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 W. H. Smith's retail expansion into Scotland. Prior to the takeover, Menzies' larger Scottish stores (carrying a very similar range of products to High Street W. H. Smith stores elsewhere) dominated the market, and the latter's presence was minimal.^[10]

Horsted Keynes branch

Recent developments

A W. H. Smith owned Funky Pigeon shop at Leeds railway station

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.^[11] It reacted to this by disposing of its overseas subsidiaries^[12] and its publishing business Hodder Headline, in order to concentrate on reforming its core businesses.^[13]

In 2006, the company decided to demerge the retail and news distribution arms of the business into two separate companies: W. H. Smith plc (retail) and Smiths News plc (newspaper and magazine distribution). The demerger took effect on 30 August 2006.^[14] On 7 September 2010, W. H. Smith bought The Gadget Shop from The Entertainer.^[15]

In April 2011, W. H. Smith agreed a deal with the legal services provider QualitySolicitors under which QualitySolicitors is to place representatives in up to 500 of its UK branches.^[16][17][18] Past Times went into administration in January 2012 and the brand name was later bought by W. H. Smith in March 2013.^[19]

In October 2013, W. H. Smith announced that it had bought the ModelZone brand and will sell products under this brand through existing W. H. Smith stores.^[20][21][22] W. H. Smith subsequently announced through the ModelZone Twitter page in November 2013 that 10 stores were to carry products under the ModelZone brand name by 23 November 2013.^[23] In October 2014, W. H. Smith 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 stores will be in low rent areas and will be let to W. H. Smith under short term leases.^[24]

Television

WH Smith 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.^[3] 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.^[25]

Operations

UK and Ireland

Former High Street, Brentwood, branch

In recent years the establishment of a retail presence in Northern Ireland (from December 2001) and Scotland (former John Menzies stores) has seen the chain spread UK-wide. In Northern Ireland there are three travel locations at Belfast City Airport, Belfast International Airport and City of Derry Airport, the last of which opened on 9 September 2010. The Belfast city centre shop was taken over by Eason & Son in October 2011.^[26]

In 2009, W. H. Smith opened two stores in Shannon Airport, County Clare, Ireland. A further three stores are operated in Dublin Airport's Terminal Two, which opened in November 2010 and 5 stores 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.^[27]

From November 2013, four more stores will open 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.^[28]

Inclusion of post offices (High Street)

In April 2007, the Post Office announced that 70 of its branches nationwide were to move into W. H. Smith stores by autumn 2008.^[29]

Hospital stores (Travel)

On 19 March 2008, W. H. Smith announced the takeover of United News, a Yorkshire-based chain of newsagents.^[30]

WHSmith Local franchises

In addition to its existing joint ventures and franchise stores, the company trialed the smaller format, convenience-based WHSmith Local concept during summer 2013.^[31] Targeted at independent newsagents and post office business owners,^[32] a total of 40 such stores were trading and a further 40 planned by the time the 2015 annual report had been published.^[33]

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 big-box stores. Many SmithBooks locations were eventually closed or converted to Coles; a few locations still retain the name as of 2013.^[34]

W. H. Smith operated stores 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 the Hong Kong International Airport (now as Page One) and in Singapore at Changi Airport, in 2004 (now Times Travel under the Times Bookstore banner).^[12]

W. H. Smith reopened its Australian operation in March 2011 following the collapse of Angus & Robertson/Borders who held the naming rights in Australia. The first new store 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.^[35]

W. H. Smith has opened stores across the major airports in India. W. H. Smith is currently in the process of planning 30 kiosks shops in China.^[36] Currently, WHSmith sponsor the IPL cricket team (Sunrisers Hyderabad) (SRH) in India.^[37]

The company retains one shop in the centre of Paris, France. In October 2008, W. H. Smith, together with SSP, opened five branches within Copenhagen Airport^[38] and in April 2009 opened a branch in Stockholm-Arlanda Airport.^[39]

WHSmith opened four branches in Helsinki Airport, Finland in late 2016 and early 2017.^[40][41]

Controversies

On 19 June 2009, W. H. Smith 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.^[42][43]

In October 2012, W. H. Smith faced backlash from shooters, after the sale of shooting magazines to children under 14 was banned, despite the fact that 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.^[44][45][46]

On 14 October 2013, W. H. Smith took their website offline because "unacceptable titles were appearing on their website". These were e-books with themes of abuse.^[47]

In 2015, W. H. Smith hit controversy when it emerged that they were charging shoppers in airports VAT, claiming the VAT back from the government, but not passing the reduction on to shoppers.^[48] In the same year, the company was also criticised for the prices charged in its branches located in hospitals, after media investigations found some items to be on sale at significantly higher prices than in high street branches.^[49]

The chain has also received criticism for the condition of its stores in recent years, with both analysts and members of the public accusing the chain of under-investing in its estate.^[50][51]

See also

• The Gadget Shop
• Past Times
• Modelzone
• Retail Book Association

References

External links

• WHSmith PLC