WH Smith loses £19m at US outlets
WH Smith, the high street retailer, warned of larger losses in its American operations yesterday as the downturn in business and tourist travel continues to affect its stores in US hotels.
WH Smith, run by the chief executive, Richard Handover, has 363 stores in American hotels and 174 in airports. While trading in the airport branches has recovered after the post-11 September slump, the hotel stores are still struggling.
Smith's American operations are now likely to lose about £19m in the year to August compared with previous analyst forecasts of £16m-£17m. The company has closed 26 US stores and has not ruled out further cutbacks.
However, Smith's shares rose 1p to 350p after analysts responded to a more robust performance from the core UK retail business. In a statement ahead of its full-year results in October, the company said that despite a slowdown in UK retail sales in the second half of the year, its stores had seen an improvement in gross margins due to stronger sales of products such as books and stationery.
Investec Henderson Crosthwaite cut £5m off its current-yearprofit forecast to £123m and shaved the same amount of its 2003 estimate, taking it to £142m.
WH Smith has said it plans to open 120 UK stores within three years to help make up for the slide in America. Last year, international travel declined by 1.2 per cent, the first drop since 1982, according to the World Tourism Organisation.
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