LONDON—British store WH Smith said it plans to close six shops and review its high street business following a drop in profits.
The chain, which sells stationery, books, and magazines, said it plans to wind down trials like the 20 Cardmarket stores and its WH Smith Local convenience stores.
The brand has 610 high street stores across the UK and said it intended to “better structure the business for the future,” according to the Daily Mail.
Shares in the company fell by over 7 percent in the early morning trading of Oct. 11.
WH Smith also has a travel arm with 839 outlets, which did have a 7 percent rise in profits to ₤103 million ($136 million).
However, overall pre-tax profits of the group as a whole were down 4 percent to ₤134 million ($177 million) for the year ending Aug. 31.
WH Smith said a recent craze for “slime” toys in the UK helped to push an “encouraging” performance over the last six months.
Stephen Clarke, group chief executive of WH Smith, told the Mail, “We had a good year in high street despite the well-documented challenges of the UK high street.
“During an encouraging second half, the business traded well and we quickly identified the latest trend in the market, becoming a one-stop-shop for all slime-related products.
“Despite this good performance, we are not ignoring the broader challenges on the UK high street and, during the second half, we conducted a business review to ensure our high street business is fit for purpose now and for the future.”
Difficult Time for British High Street
The chain’s troubles come during a difficult time for British high street brands, with many struggling or closing under pressure from online retailers.
In late September, business minister Greg Clark said the government is considering relaxing business rates—property taxes for businesses—to help the UK high street.
Earlier this year restaurant chains Jamie’s Italian and Prezzo announced closures, while toy chain Toys r Us went into administration along with electronics retailer Maplin.
A sharp fall in the pound since the Brexit vote has increased inflation over 3 percent, more than the Bank of England’s target of 2 percent. This means importing goods is more expensive, and these costs have been passed onto retail shoppers.
At the same time, online sales have continued to rise as more people purchase online because it’s easier and cheaper than on the high street.
Paul Martin, head of UK retail at KPMG, told the BBC, “With the overall market not growing, it is all about market share, and 20% of that market is held by online players. If you don’t have the right online offering, again, you will struggle.”
Retailers now have to offer something unique out of the shopping experience, a lesson Toys r Us learned to its cost.
Simon Thomas of Moorfields Advisory, the chain’s administrators, told the BBC, “We’ve got very large stores which are fairly impersonal. People are looking now to have a better shopping experience, and we were unable to deliver that.”
He added, “On top of all that we have the online problem … people can go into our shop, look at something, then look at an alternative and buy it at a cheaper price.”