W H Smith
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This article is about the retail chain; for the businessman and politician of that name, see William Henry Smith.
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W H Smith is a British company, best known for its chain of high street and railway station shops selling books, stationery, magazines, newspapers, and entertainment products. It is also a major distributor of newspapers and magazines, and formely owned publishing businesses, and a number of other retail chains in the United Kingdom, North America, and the Pacific Rim.
WHSmith PLC is listed on the London Stock Exchange as SMWH, and is part of the FTSE 250 Index.
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Retail operations
WHSmith Retail is divided into WHSmith High Street, WHSmith Travel Retail and WHSmith Direct. WHSmith Retail employs 19,693 people, and has sales of £1.5bn.
WHSmith High Street
WHSmith High Street is responsible for the operation of the company's 542 high street stores across the UK.
WHSmith Travel Retail
WHSmith Travel Retail is responsible for the operation of the company's 200 stores at railway stations and airports throughout the UK. These stores serve mainly as a newsagent; selling predominantly newspapers, magazines, books and confectionery.
WHSmith Direct
WHSmith Direct is responsible for the company's e-commerce website WHSmith.co.uk which sells goods similar to those for sale in WHSmith high street shops.
News Distribution
WHSmith News is the company's newspaper and magazine distribution business, delivering to 22,000 customers via its 54 distribution centres across the United Kingdom. It employs 4,312 people and has sales of £1,067 million.
History
W H Smith originated as a newsvendor business established in London in 1792 by Henry Walton Smith and his wife Anna. After their deaths, the business - valued in 1812 at £1,280 - was taken over by their son William Henry Smith, and in 1846 the firm became W H Smith & Son when his son, also William Henry, became a partner. The firm took advantage of the railway boom by opening news-stands on railway stations, starting with Euston in 1848. They also made use of the railways to become the leading national distributor of newspapers. The younger W H Smith used the success of the firm as a springboard into politics, becoming an MP in 1868 and serving as a minister in several Conservative governments.
After the death of W H Smith the younger, his widow was created Vicountess Hambleden in her own right; 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. 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. 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.
From the 1970s, W H Smith began to expand into other areas of retail. W H Smith Travel operated from 1973 to 1991, The Do It All chain of DIY stores started with a 1979 acquisition, became a joint venture with Boots in 1990 and was sold in 1996. The upmarket bookshop chain Waterstone's, founded by former W H Smith executive Tim Waterstone in 1982, was bought in 1989 and sold in 1998. In 1986 W H Smith bought the Our Price music chain; in the 1990s it also bought other music retailers including the Virgin Group's smaller (non-Megastore) shops.
Though Britain has always been W H Smith's home territory (not the UK; it was relatively late in expanding into Northern Ireland), it has also ventured into other countries at times. Canadian operations began in 1950 and continued until 1989; United States from 1985 until 2003; Australian and New Zealand subsidiaries acquired in 2001 were disposed of, as were those in Hong Kong and Singapore, in 2004. The company retains one shop in the centre of Paris, France.
For many years, the main rival to both WHSmith's railway station and news distribution business was John Menzies. However, in 1998, WHSmith bought all retail outlets of Menzies (in a move in which John Menzies intended to concentrate on its distribution business). Since then, nearly every large railway station in Britain has had a branch of WHSmith in it.
Takeover plans
In recent years W H Smith has had a series of problems: its retail side has had difficulties competing with specialist book and music chains on one side and large supermarkets on the other, while the distribution side had to back down from an exclusive distribution deal with Tesco after newspaper publishers threatened to cancel their distribution contracts. There was also a significant shortfall in the group's pension fund. The result was several years of poor financial performance, and a takeover bid by the Permira group, which fell through. The group has reacted to this by disposing of its overseas subsidiaries and its publishing business Hodder Headline, in order to concentrate on reforming its troubled core businesses.
In the year to 31 August, 2004 W H Smith plc had a turnover of £2,834 million, on which it made a pre-tax loss of £130 million, due to significant "exceptional items" and losses on the sales of subsidiaries. Disposals during the year reduced the group's net assets from £409 million to £256 million. At its December 2004 share price of around 323p, the company's market capitalisation was just under £600 million.
Awards and prizes
W H Smith is the sponsor of the WH Smith Literary Award, which has been running since 1959 and is one of the most wide-ranging of literary prizes, admitting works of all genres from authors of all ages and both genders from across the world. W H Smith also sponsors the W H Smith Children's Book of the Year prize, which is part of the British Book Awards. In recent years it also ran the People's Choice Book Awards, though these were discontinued as the group slimmed down. The W H Smith Illustration Awards were awarded between 1987 and 1994.
W H Smith in British life
"Smith's" shops are a familiar sight on British high streets. Their book range is populist and slightly conservative; despite their former claim to be the "World's Best Booksellers", they have never sought to compete with specialist booksellers in the highbrow and academic markets or on depth in particular genres (except perhaps for railway-related books for enthusasists in their railway station branches). Similarly their audio and video departments tend to concentrate on chart pop music and blockbuster films. On the other hand, their large shops typically offer a larger range of specialist magazines than most newsagents.
For many years W H Smith's policy of not stocking the satirical magazine Private Eye, because of the company's fear of being held responsible for any libels it might contain, led to the magazine stigmatising it as "The World's Worst Booksellers" and "W H Smug". Their shops and distributors now carry the Eye.
External links
Company websites:
- WH Smith plc corporate website (http://www.whsmithplc.co.uk/)
- WHSmith.co.uk (retail site) (http://www.whsmith.co.uk/)
- News distribution website (http://www.whsmithnews.co.uk)
- WHSmith recruitment website (http://www.whsmithcareers.co.uk/)
- WHSmith English-language bookshop in Paris (http://www.whsmith.fr/)
Other websites:
- WH Smith tries to tempt browsers (http://www.guardian.co.uk/business/story/0,,1270396,00.html) - Guardian story from July 2004 on the company's recovery plans