Urgent action needed at WH Smith

One of the comments often made about WH Smith is that it is worthy but dull. After yesterday's performance, however, the retail group looked neither worthy nor dull. An 18 per cent profits decline in a core business would rock investor confidence in any company, but when the warning comes from a retail stalwart like Smith, questions must be asked. Nobody is having much fun on the high street these days but is WH Smith suffering from problems of its own making?

To be fair to the management, it has been making noises about difficult trading for some time. The problems seem to be worse than anyone thought. Though WH Smith remains a strong brand name, its strongholds are being eroded on all sides.

On one flank are the supermarket operators sniping at the newspaper and magazine business more than WH Smith would like to admit. On the other side are the specialists, some of which are part of the Smith stable. If you want a good choice for books, go to Waterstones or Dillons. Music? Try Our Price or HMV. It is a problem common to most multiple purpose retailers.

Under Sir Simon Hornby, the former chairman, WH Smith was always viewed as rather old fashioned. Management seemed stuffed with leftovers from the Edwardian age who can't understand why the sun isn't shining on them any more.

Experts are wondering how much has really changed under the likeable Sir Malcolm Field. The sun is certainly not shining on British high streets but analysts wonder whether WH Smith management is just too "nice" for the cut and thrust of modern retailing. Another worry is WH Smith's battle plan, which looks a trifle limp. Multimedia looks all very well but does WH Smith have the expertise to deliver? Nor are children's play areas really the stuff of corporate turnround. Something a little more convincing is required as a matter of urgency.