WH Smith prepares to fight superstores

WH SMITH is looking at developing a new superstore format to fight back against the invasion of American giants such as Borders.

WH Smith is considering opening 20 to 25 superstores that would offer wider ranges of books, stationery, newspapers and magazines. The stores would also feature a "lifestyle" element with coffee shops, seating areas and interactive media to enable ordering via the internet. Listening booths for audio books may be included.

The company said it is considering converting its largest stores of around 20,000 square feet to the superstore format.

Many of WH Smith's largest stores have spare floors that are not used as retail space. There is also scope to expand into areas currently used for warehousing. However, the company is also looking at opening some new, larger stores of 30,000-35,000 square feet on selected high streets.

WH Smith's management is examining how best to utilise the extra space in larger stores and whether the format can make money. It has not yet made a decision to press ahead but is aware of a gathering momentum in superstore retailing.

The move has been prompted by the sudden dash for growth by rivals such as Waterstone's and Borders, the US book and music retailer. Waterstone's, which was sold by WH Smith earlier this year to a consortium led by Tim Waterstone, opened its first book superstore in Glasgow last autumn.

Waterstone's is re-launching its Manchester branch as a superstore in November and thinks there may be room for 20.

Borders, which operates huge 40,000 square feet superstores, opened its first UK outlet on London's Oxford Street in August and a second store in Brighton earlier this month. The US group has announced plans for another four.

WH Smith is worried that it could get left behind if these stores start to attract more customers. It is possible that WH Smith could start testing a superstore format next year.

Analysts said it was not surprising that WH Smith should experiment with larger stores. However, they said it should be careful not to alienate its core customer base. Many of its shoppers do not like stores such as HMV, Virgin or Waterstone's because they are too large with a product range that is too wide.

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