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WHSmith

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WHSmith PLC
Company typePublic
LSE: SMWH
IndustryRetail
Founded1792; 232 years ago (1792) in London, England
HeadquartersSwindon, United Kingdom
Number of locations
1,300 (612 high street & 768 travel) (August 2016)[1]
Key people
Henry Staunton (Chairman)
Carl Cowling (CEO)
Revenue£1,397 million (2019)[2]
£160 million (2019)[2]
£108 million (2019)[2]
Number of employees
14,321 (2019)[2]
WebsiteCorporate

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 confectionery.

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 £107,686 in 2023)—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, and a publishing business based at the Steam Press, Cirencester.[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 in 1891, 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
WH Smith bearing the former logo in Huntington, England, in 1986

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] The company announced in late 2018 that the trial of Cardmarket would be wound up, with the closure of the Cardmarket stores. This was in addition to the announcement of the closure for at least 6 WHSmith stores which were deemed economically unviable following a strategic business review. [27]

Late in 2017 the Company purchased Cult Pens, a UK based retailer of stationery items, for an as yet undisclosed figure.[28]

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.[29]

Operations

United Kingdom

Brentwood High Street branch
Interior of a branch in Pontefract, West Yorkshire seen in 2019.

Since 2007, the company has taken on a number of Post Office branches, mainly within its high street shops.[30] By April 2016, this had reached 107, including former Crown Post Offices, with plans for an additional 61.[31]

WHSmith also operate a number of shops within hospitals, following its acquisition of Yorkshire-based newsagent chain United News in March 2008.[32]

In addition to its existing joint ventures and franchise shops, the company trialed the smaller format, convenience-based WHSmith Local concept during 2013.[33] Targeted at independent newsagents and post office business owners,[34] a total of 40 such stores were trading and a further 40 planned by the time the 2015 annual report had been published.[35]

Since 2011, the company has also opened shops under its Funky Pigeon brand, offering stationery and personalised greetings cards.[36]

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.[37]

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.[38]

WHSmith has opened shops in major Indian airports. WHSmith is currently in the process of planning 30 kiosk shops in China.[39] Currently, WHSmith sponsor the IPL cricket team (Sunrisers Hyderabad) (SRH) in India.[40]

The company retains one shop on Rue de Rivoli in the centre of Paris, France.[41][42] In October 2008, WHSmith, together with SSP, opened five branches within Copenhagen Airport,[43] and in April 2009 opened a branch in Stockholm-Arlanda Airport.[44]

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.[45]

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.[46]

WHSmith opened four branches in Helsinki Airport, Finland in late 2016 and early 2017.[47][48]

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.[49][50]

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.[51][52][53]

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.[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 an investigation by The Independent revealed that WHSmith and other airport retailers were charging VAT to shoppers travelling outside the European Union, then claiming the VAT back from the government and not passing the refund on to customers.[57] This was made possible by the practice of scanning customer's boarding passes at the till point – solely for the benefit of the company – which made the passengers unwitting accomplices in their own deception. After a public outcry, a customer revolt in which many refused to hand over their boarding passes, and an intervention by Parliament, 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.[58]

In 2015, 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.[59] In May 2018, WHSmith apologised after it was revealed that it had made more than £700 by selling single tubes of toothpaste for £7.99 through its branch in Pinderfields Hospital, Wakefield.[60] 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.[61]

See also

References

  1. ^ "Our stores". whsmithplc.co.uk. Retrieved 29 April 2017.
  2. ^ a b c d "Annual Report 2019" (PDF). WHSmith. Retrieved 5 March 2020.
  3. ^ Armstrong, Ashley (2 January 2017). "WH Smith boss opens up about mental health, coming out and the retailer's 225-year anniversary in first ever interview". The Telegraph. Retrieved 23 August 2017.
  4. ^ a b c d e f g h i j k l m "History of WHSmith". whsmithplc.co.uk. Retrieved 3 April 2015.
  5. ^ a b c d e f "The First W H Smith Railway Bookstall". Questia. History Today. November 1998. Retrieved 20 August 2010.
  6. ^ Lange, Ernst Philipp K. (1861). "W. H. Smith & Son's Subscription Library (advert)". The madman of St. James', tr. from the Germ. of Philip Galen, by T.H. London: C. H. Clarke. Retrieved 27 April 2018. {{cite book}}: External link in |chapterurl= (help); Unknown parameter |chapterurl= ignored (|chapter-url= suggested) (help)
  7. ^ "Circulating and Lending Libraries", Handbook to London as It Is, London: John Murray, 1879 {{citation}}: External link in |chapterurl= (help); Unknown parameter |chapterurl= ignored (|chapter-url= suggested) (help)
  8. ^ "History". ISBN. Retrieved 3 April 2015.
  9. ^ Christman, Ed (17 May 1997). "With peluso to exit, The Wall's future remains a question mark". Billboard: 54–55.
  10. ^ "WHSmith". Hoovers. Retrieved 25 October 2014.
  11. ^ "John Menzies takeover gets all-clear". BBC News. Retrieved 3 April 2015.
  12. ^ Stevenson, Rachel (23 July 2004). "Permira drops £940m offer for WH Smith". The Independent. Independent Digital News and Media Ltd. Retrieved 27 April 2018.
  13. ^ a b "WH Smith sells Australia business". BBC News. Retrieved 3 April 2015.
  14. ^ "The Independent - 404". The Independent. Retrieved 3 April 2015.
  15. ^ "WH Smith unveils separation plan". BBC News. Retrieved 3 April 2015.
  16. ^ W. H. Smith buys Gadget Shop Retail Week, 7 September 2010
  17. ^ Campbell, Lisa (11 May 2012). "W H Smith 'eyeing Clinton Cards stores'". The Bookseller. Retrieved 23 August 2017.
  18. ^ "QualitySolicitors to put desks in 500 WHSmith branches". The Lawyer. 7 April 2011. Retrieved 3 May 2012.
  19. ^ Eligon, John (28 October 2011). "Selling Pieces of Law Firms to Investors". The New York Times. Retrieved 3 May 2012.
  20. ^ "QualitySolicitors in WHSmith tie-up". Law Society Gazette. 7 April 2011. Archived from the original on 21 January 2012. Retrieved 3 May 2012.
  21. ^ "Past Times website taken down as WH Smith buys the brand". Internet Retailing. 12 April 2013. Retrieved 3 April 2015.
  22. ^ Holland, Tiffany (10 October 2013). "WHSmith reveals full-year profit ahead of expectations". Retail Week. Retrieved 3 November 2013.
  23. ^ Creevy, Jennifer (10 October 2013). "WHSmith boss Steve Clarke: "Our numbers speak for themselves"". Retail Week. Retrieved 3 November 2013.
  24. ^ Ruddick, Graham (10 October 2013). "W. H. Smith profits rise again despite falling high street sales". The Daily Telegraph. London. Retrieved 3 November 2013.
  25. ^ Tweet by @ModelZone on 13/11/13, Twitter. "9 more to open by 23/11/13 in the following locations- CARDIFF, CROYDON, GATESHEAD METRO, GLASGOW SAUCHIEHALL..."
  26. ^ "WHSmith to launch standalone budget greetings cards chain". The Guardian. London. 16 October 2014. Retrieved 3 April 2015.
  27. ^ Rigby, Chloe. "WH Smith reviews its high street presence, and closes six stores - Strategy and Innovation". InternetRetailing. Retrieved 3 January 2019.
  28. ^ "Companies House". Companies House.
  29. ^ Shadow cast over cable TV. Jonathan Miller, Media Correspondent. The Times, Monday, 1 December 1986; pg. 3.
  30. ^ "In-store post offices at WH Smith". BBC News. 19 April 2007.
  31. ^ Butler, Sarah (13 April 2016). "Post Office to move up to 61 branches to WH Smith". The Guardian. Retrieved 23 August 2017.
  32. ^ "Yorkshire hospital shops chain bought by WH Smith". Yorkshire Post. Retrieved 3 April 2015.
  33. ^ "WH Smith Local franchise gathers interest from indie retailers". The Grocer. 1 March 2014. Retrieved 28 January 2016.
  34. ^ "WHSmith Local". WHSmith PLC. Retrieved 28 January 2016.
  35. ^ "Annual Report and Accounts 2015" (PDF). WHSmith PLC (pdf). 15 October 2015. Retrieved 28 January 2016.
  36. ^ Harrison, Nicola (21 April 2011). "WHSmith to launch Funky Pigeon stores". Retail Week. Retrieved 23 August 2017.
  37. ^ SmithBooks - ON. Yellowpages.ca. Retrieved on 19 September 2013.
  38. ^ W. H. Smith touches down in Australia Archived 25 February 2011 at the Wayback Machine Inside Retailing
  39. ^ W. H. Smith 'Travel Shops' Help High Street Falls Sky News Business
  40. ^ "WHSmith to be principal sponsor for SunRisers Hyderabad". The Hindu Businessline. Retrieved 22 April 2014.
  41. ^ "WHSmith Paris". Whsmith.fr. Retrieved 27 November 2017.
  42. ^ Kemp, Margaret. "WH Smith Reopens Traditional English Tearoom on Rue de Rivoli". Bonjourparis.com. Retrieved 27 November 2017.
  43. ^ Williams Fannin, Clare (1 December 2008). "SSP and WHSmith open first of five news shops at Copenhagen" (PDF). SSP. Archived from the original (PDF) on 11 July 2011. Retrieved 11 May 2009.
  44. ^ Englund, Raine (1 April 2009). "The first WHSmith in Sweden opens at Stockholm-Arlanda Airport" (PDF). SSP. Retrieved 11 May 2009.
  45. ^ "W. H. Smith's 'Irish' book buyer for Terminal 2 stores is Australian". Independent.ie. 5 August 2010. Retrieved 20 August 2010.
  46. ^ Eason loses out to W. H. Smith in deal to run bookshops at Dublin Airport. Independent.ie (21 July 2013). Retrieved on 19 September 2013.
  47. ^ "Finavia brings traveller retail expert WHSmith to Finland". Finavia. 1 September 2016. Retrieved 6 June 2017.
  48. ^ "WHSmith to open four shops at Helsinki Airport". Finavia. 2 May 2017. Retrieved 6 June 2017.
  49. ^ Amar Singh WHSmith sorry for Josef Fritzl Father's Day promotion Archived 2 October 2009 at the Wayback Machine 19 June 2009
  50. ^ Stina Backer Fritzl: a perfect gift for Father's Day, say Tesco and W. H. Smith The Independent (London), 20 June 2009
  51. ^ Eden, Richard (14 October 2012). "W. H. Smith bans children from buying shooting magazines". The Daily Telegraph. London. Retrieved 30 March 2013.
  52. ^ Silverman, Rosa (24 October 2012). "Team GB shooting coach hits out at W. H. Smith magazine ban". The Daily Telegraph. London. Retrieved 30 March 2013.
  53. ^ "Key Issues". Basc.org.uk. Archived from the original on 2 February 2013. Retrieved 30 March 2013.
  54. ^ "W. H. Smith takes website offline after porn e-book scandal". BBC News. 14 October 2013. Retrieved 19 January 2014.
  55. ^ "The Dismal Decline of WHSmith". Management Today. 21 October 2015. Retrieved 25 January 2016.
  56. ^ "WH Smith share price remains flat despite fall in underlying sales – and its carpets are still a mess". City AM. 12 November 2014. Retrieved 25 January 2016.
  57. ^ Neville, Simon (15 October 2015). "WH Smith continues to demand boarding passes from passengers to avoid paying VAT". The Independent. Retrieved 23 August 2017.
  58. ^ Calder, Simon (14 March 2017). "Boots and WH Smith are giving tax back to airport customers - how does it work?". The Independent. Retrieved 23 August 2017.
  59. ^ "WH Smith to cut prices in hospitals after claims of exploiting NHS patients". The Guardian. 22 September 2015. Retrieved 25 January 2016.
  60. ^ "WHSmith 'sorry' for Pinderfields Hospital £7.99 toothpaste". BBC News. 12 May 2018. Retrieved 12 May 2018.
  61. ^ "WH Smith criticised for selling toothpaste at £8 a tube in hospital". The Independent. 12 May 2018. Retrieved 12 May 2018.
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