WH Smith is considering cutting up to 1,500 jobs after the lockdown caused sales to fall.
The newsagent, which was established in 1792, shared the restructure plans on Wednesday after sales fell dramatically as less people visited its stores on high streets, at train stations and at airports due to the disruption caused by the pandemic.
The group said the impact of the coronavirus outbreak meant it expected to report a loss of between £70m and £75m for the year to the end of August 2020.
“Covid-19 continues to have a significant impact on the WH Smith Group” Group Chief Executive, Carl Cowling, commented. “Throughout the pandemic, we have responded quickly and taken decisive actions to protect the business including substantially strengthening our financial position. We have also welcomed support from Government where available.”
“In our Travel business, while we are beginning to see early signs of recovery in some of our markets, the speed of recovery continues to be slow. At the same time, while there has been some progress in our High Street business, it does continue to be adversely affected by low levels of footfall. As a result, we now need to take further action to reduce costs across our businesses. I regret that this will have an impact on a significant number of colleagues whose roles will be affected by these necessary actions, and we will do everything we can to support them at this challenging time.”
203 WH Smith High Street stores hosting Post Offices remained open through the pandemic to provide vital postal and banking services to their local communities. Since June, they have reopened their remaining High Street stores with all 575 now open. The group’s online businesses have continued to perform strongly.
As a result of the impact on passenger numbers at the company’s travel sites and lower footfall on the UK high street, they have now have taken the difficult decision to review store operations across both their Travel and High Street businesses, which will result in job losses.
It is believed that the costs associated with the restructure will be in the region of £15m - £19m, reflecting the group’s enhanced redundancy policy.
“While we are mindful of the continuing uncertainties that exist, we are a resilient and versatile business” Cowling concluded. “The operational actions we are taking along with the financing arrangements that are in place, put us in a strong position to navigate this time of uncertainty and we are well positioned to benefit in due course from the recovery of our key markets.”