There were fresh fears for the high street today in the lead-up to Christmas as some of the country’s best-known retailers warning of shop closures, slowing growth and weaker customer sentiment.
WH Smith's larger travel arm delivered strong profit growth again but it hinted at store closures on the high street as it noted that 480 of its leases are set to expire in the next three years and that ”we only renew a lease where we are confident of delivering economic value”.
Boss Carl Cowling told the Standard that there will likely be closures, but that the company also hoped to negotiate lower rents to keep stores open as demand for retail space falls. He added that the high street arm was still profitable, however, and would remain part of the wider business.
“We’ve closed a handful over the next twelve months, we’re likely to close a handful more over next twelve. And in three years it’ll probably be less stores. But we’re still going to remain on the high street.
“The high street business is still profitable and we don’t have a long tail of unprofitable stores.”
The business has been upping its focus on its better-performing travel arm, with Cowling saying the business “is now primarily a global travel retailer”. As the post-pandemic holiday boom continues, travel profits more than doubled, and were five times the amount made by the once-dominant high-street arm, ensuring combined profits grew to £110 million.
Discount retailer B&M saw a chance to up its estate, setting a long-term target of 1,200 UK stores, including 125 new openings in the next three years. It currently has about 700 shops in the UK.
But its results this morning failed to please the City, with shares down as much as 6.2% to 504.2p amid signs of slowing growth. Peel Hunt analysts said "the latest news is not overly positive".
Another discount retailer, The Works, cut its profit guidance as it warned of a difficult Christmas period and the need to rely more on promotions to get customers into its shops. That sent shares tumbling by as much as 40% to 24.4p, valuing the business at around £15 million.
