LONDON: Books and stationery retailer WH Smith Plc announced it is opening post office facilities in 70 of its high street stores. The firm has concluded an agreement with the Post Office for the purpose after a successful trial that involved franchises at six of its stores.
Under the deal, existing post offices in the selected localities will be relocated at WH Smith stores. The deal is expected to add around 2.5 million pounds to the firm's annual profits, it said. The rollout will be completed by autumn of 2008.
The company said its recovery in trading is on track and its pretax profits have gone up 7 per cent to 59 million pounds in the six months ended 28 February. It has now cut down its reliance on items like DVDs and CDs, sales of which have already declined. Instead, it said it will now concentrate on books and core stationery products. This change of focus has resulted in a 6 per cent fall in like-for-like sales, but the company has managed to save 8 million pounds in costs.
WH Smith has 672 stores in the country.
The company said the post offices are a "natural fit" with its brand. It claimed customers have appreciated the convenient location, modern and inviting environment, shorter queues, improved service and additional services.
Post Office Ltd managing director Alan Cook said the combination of a WH Smith store and a post office branch makes perfect sense for customers. He hoped it will strengthen the respective businesses.
WH Smith's chief executive Kate Swann has initiated a cost saving and a major shift in the mix of products to see the company through difficult times. The focus now is towards its core categories like stationery, books, newspapers and magazines and away from entertainment products. She has also divested the company's travel businesses in the U.S. and Far East and the publishing business, Hodder Headline.
Meanwhile, the Communication Workers Union reacted angrily to the decision to open post office at WH Smith stores. It has now threatened a postal strike and urged the public to stay away from WH Smith stores.
A spokesperson for the Post Office said all the affected employees will be offered a choice of voluntary redundancy, jobs within the department on in WH Smith.
