WH Smith has set out plans to open 100 new stores in travel locations despite its operations suffering heavy losses during the pandemic.
The openings will take place during the next three years with over 60 in North America. The retailer has secured £325m in financing to fund its growth plan in the form of convertible bonds, as well as a £250m credit facility from its banks.
WH Smith generated more than half of sales and profits from its stores in airports, train stations, and motorway service areas before the pandemic struck. It expects trade to recover to 2019 levels within the next two to three years.
The plans were revealed along with interim results, which WH Smith described as “encouraging”.
In the six months to 28 February, group revenue dropped 44% to £420m as the retailer’s stores were impacted by coronavirus restrictions. Revenue in its Travel division plummeted 65% to £150m, although there was a smaller decline in its High Street unit where sales reduced by 14% to £270m.
Trading profit in the High Street business came in at £33m but Travel posted a £31m loss.
However, the WH Smith said the performance was better-than-expected and it now forecasts that the outturn for its full year will be modestly ahead of current expectations. It pointed to “encouraging signs of growth”, especially in the key US travel market.
Chief Executive Carl Cowling said: “Thanks to the outstanding work of all our colleagues across the business, the group has adapted well to the evolving trading environment and we are in a strong position as our markets begin to recover.”
He added: “We are financially strong as a result of the actions we have taken, and the new financing arrangements also announced today will put us in an even stronger position to capitalise on the growth of our key markets and take advantage of the many exciting opportunities ahead.”
