(Reuters) - British retailer WH Smith on Thursday said total revenues plunged 85% in April as sales at its airport and train station shops and kiosks were hit by government travel restrictions to halt the spread of the coronavirus.
WH Smith, founded more than 200 years ago as a news vendor in London, has expanded at a host of major airports to take advantage of rising passenger numbers to help to offset the decline of British high street shopping.
The company, which now sells everything from books and sandwiches to headphones, also bought Marshall Retail Group for $400 million last year to cement its position at airports in the United States.
The travel business made up more than half of revenue in the half-year to end-February.
The group’s airports and railway shops boosted revenue in the six months to February 29, helping to compensate for declining sales at its high street stores, but coronavirus-led disruptions have reversed this trend.
In April, travel sales were down 91% and high street sales down 74%.
Shares in the company, which usually operates more than 1,700 stores, primarily in Britain, were down 6% at 861.5 pence by 1004 GMT.
“Customers were often in a hurry and accepted high prices because they didn’t have the time or opportunity to go elsewhere,” AJ Bell investment director Russ Mould said of the company’s travel shops. “This business model enabled WH Smith to successfully expand beyond the UK.”
WH Smith said it was planning a phased store re-opening schedule across its international territories, UK travel channels and high street business.
But the company said it said it could not forecast with any certainty the timing, nor the speed of recovery of its store re-openings.
“There was very little impact of COVID-19 on our first-half results, however, inevitably the performance in the second half will be very different,” Chief Executive Officer Carl Cowling said.
The company said 203 of its stores with post offices and 130 stores in hospitals in the UK were currently open, but few people were visiting the latter.
WH Smith has already tapped the government’s coronavirus aid scheme, suspended its dividend, furloughed employees, raised equity, secured 120 million pounds ($146.41 million) in new lending facilities and waivers for banking covenant tests to survive the crisis.
Headline pretax profit fell 1% to 80 million pounds for the six months ended Feb 29, in line with the company’s forecast. Revenue rose 7% to 747 million pounds.
($1 = 0.8196 pounds)
Reporting by Tanishaa Nadkar and Pushkala Aripaka in Bengaluru; Editing by Patrick Graham/Sherry Jacob-Phillips/Jane Merriman
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