You sometimes forget that, back in the heyday of the CD, in many British towns WH Smith was one of the most important music sellers.
But the books, stationery, news and entertainment retailer has been busy downsizing its CD and DVD departments for a decade now, so that such products now account for just 1-2% of the retailer’s sales, compared to 25% just eight years ago. And the company says it has no plans to restore its CD or DVD operations if HMV disappears from the high street.
Asked whether she saw the likely streamlining and possible collapse of the HMV retail chain as an opportunity to expand her own company’s entertainment retail operations, WH Smith CEO Kate Swann gave the Financial Times a resounding “no”.
She told the paper: “[Entertainment retail] just isn’t profitable. HMV were the last man standing … pretty much everybody went because nobody could make any money out of it. You can’t create a proposition which customers find attractive and make money with the current structure of the market. If there was some way we could change that structure and could create something which is attractive to customers, and you could make some money, yes, that would be our reason to reconsider it. Otherwise no”.
WH Smith’s own future was in doubt ten years ago, though under Swann’s leadership the firm has regained some stability, partly through cost efficiencies, and partly through focusing on more profitable product lines, hence the move away from entertainment. Sales were down at the company’s shops in the last quarter, though it is still set to make pre-tax profits in the region of £105 million for the current financial year.