Trouble at WH Smith

Kate Swann says the company's results are "unacceptable"

WH Smith has revealed a pre-tax loss of £72m for the six months to 29 February after an "unacceptable performance" by its High Street stores.

The figure, which includes exceptional costs such as an expensive retreat from the US, compares with a £54m pre-tax profit for the same period last year.

WH Smith said it was already taking action to end operational shortcomings.

Work ahead

WH Smith chief executive Kate Swann said she believed the business had strong assets on which to build, despite the poor results, which were "the culmination of a number of years where the business has not fulfilled its potential".

"We have already taken action to strengthen the senior management team and address the operational shortcomings of the business," she said.

But what can WH Smith do improve its performance ?

Working Lunch asked two top branding companies for their ideas on how the company could change its image.

Tony Howard, Managing Director at Roundel, suggested changing the logo and says this could be done in three ways.

The first would be to leave things much as they are, keeping the brand "cheap and cheerful" - somewhere where you can always pop in for a paper or a pen.

The second approach would be to make the logo more refined, a little bit more classical and less brash.

"We suspect the blue colour would score highly on any recognition scale for the WH Smith brand but we would make it richer and deeper"

"If the colour proved not to be as important as the name, we might look at an alternative colour, like red." he said

Signature brand

How a W H Smith store might look with a signature logo and different colour scheme

The third approach is to give WH Smith some personality and create a 'signature' brand.

"We believe this would move them away from the anonymous 'cheap and cheerful' and back to the qualities of a 'family firm' where customers are treated as individuals.

"WH Smith sells materials of communication, mostly on paper, so a signature would seem appropriate.

"Again we have used a richer blue but we did think that the dark green was an interesting alternative" he said.

"The music side should go"

Factory, the people behind the last redesign of the Concorde interior, took a radical look at the purpose of a WH Smith store.

Adam White, Creative Partner at Factory, said the company needs to take a long hard look at what they sell.

"We think the music side should go because there are plenty of other people doing that - not least the move to internet sales - and they should concentrate on magazines and stationary, and do both better than anyone."

Factory also came up with some ideas for revamping the inside of the store including a new 'browse' zone where people can have look at the newspapers and magazine, possibly via the internet.

One of the key areas of WH Smith's business is selling news and information, in the form of newspaper and magazines.

Adam White thinks this could be taken a step further.

W H Smith could replace the traditional shop front signs with TV screens showing 24 hour news channels

"We recommend the area traditionally used for signs outside the shop could becomes a live, scrolling window onto what is happening at that moment in time - a tablet of running flat-screens being fed from Reuters - or the BBC - maybe Working Lunch - there should be a constant stream of news ideas to support what they sell."

But Adam warns one thing should not change, the company name

"They should avoid fiddling around with their name. W H Smiths should never drop the W H and become what we familiarly know it by .. Smiths"