October 14, 2004

WHSmith report losses

by brian_turner

Here’s how the BBC reported it:

WH Smith plunges into the red

Struggling retailer WH Smith has plunged into the red, making one of the worst losses in its 212-year history.

The company reported an annual pre-tax loss of ’135m ($242m), as it was hit by exceptional charges of ’200m linked to unsold stock and restructuring costs.

Sales at its 673 UK stores fell by 2%, with the company hit by falling book and music sales.

A retail analyst interviewed on the BBC claimed that the problem was WHSmith not trying to sell enough – ie, that they should force prospective customers to walk right across the shop, funneled by aisles, to tempt them to buy more.

In my opinion that’s missing the point – the cornerstone of marketing is that you target your client’s needs. And in many instances, WH Smith simply does not do that a a retail outlet.

Anyone who’s ever visited a WH Smiths knows what the problem is with the music and books – the ranges for both are too small, and what is there is over-priced.

In simple terms – there’s no reason to shop at WHSmith for books or music. Products are put up aimlessly.

What’s worse, in my opinion, is that WHSmith has made little effort marketing itself as an online provider – if you are a business and have the money to force a big presence on the largest marketplace on earth, then you need to do it.

Just my 2 cents.

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