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Last Updated: Tuesday, 23 January 2007, 18:02 GMT
WH Smith shrugs off fall in sales
WH Smith store
WH Smith said it is selling fewer items more profitably
WH Smith has said it is continuing to improve its profitability, despite seeing sales drop over Christmas.

The retailer said like-for-like sales - which ignore the impact of new stores - fell 8% at its High Street stores in the 7 weeks to 20 January.

The decline was 9% over the 20 weeks to 20 January, but WH Smith said the lower sales were offset by better cost controls and higher profit margins.

The firm said profit growth was on track, lifting its shares 5.6%.

Rebalancing act

"In a competitive period on the High Street, we continued to deliver our strategy to improve profitability," said chief executive Kate Swann.

We saw competitive trading in our markets, but we continued to deliver good profit performance
WH Smith statement

"We increased the pace at which we are rebalancing the mix of our business towards our core categories."

The company said it had increased its gross margin at its High Street stores by three percentage points thanks to the changes, as well as through better buying, low-cost sourcing and improved pricing.

WH Smith's travel division recorded a 4% rise in like-for-like sales over the 20 week period, with sales and profit margins increasing.

For the group as a whole, WH Smith's like-for-like sales were down 6%.

"As anticipated, we saw competitive trading in our markets, but we continued to deliver good profit performance in line with our expectations," the company said.

Looking ahead, Ms Swann said the firm remained "cautious" about the outlook for consumer spending.

In August last year, WH Smith demerged from its newspaper distribution business Smiths News.

Earlier this month, WH Smith said it was planning to shut its final-salary pension scheme in a move that would affect about 11% of its workforce or about 2,000 staff.

WH Smith to close pension scheme
10 Jan 07 |  Business
WH Smith profits up but sales dip
12 Oct 06 |  Business

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