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April 24, 2023 : UK-based retailer WHSmith is expanding its presence in the North American airport and resort market to generate a 12-month profit of £50 million ($62 million) by August 2023, the end of the company’s financial year. WHSmith currently operates 319 speciality retail stores in North America, including 222 located in airports, 120 InMotion stores, and 97 in resorts. This year, the retailer has gained 28 stores, including 11 in Canadian airports. WHSmith’s CEO, Carl Cowling, said the company has a significant new store pipeline, having won many tenders. In the current financial year, WHSmith expects its North American division to generate over £50 million in trading profit, making it the company’s second-largest division.
Despite disruptions caused by the pandemic, WHSmith’s business has improved as passenger traffic has increased. According to TSA travel data, passenger numbers were just 4% below 2019 in the company’s first fiscal half, with international passengers recovering strongly. In the North American market, WHSmith’s first-half revenue was up 53% to $220 million (£177 million), with a trading profit of $17 million, reflecting the recovery in passenger numbers, better margins, and the foreign exchange benefit.
The company’s Travel UK business is still the leader in profit terms. Still, North America offers better long-term opportunities as a more diversified market with multiple brands and a high success rate of winning new tenders. The US is a significant travel retail market. WHSmith’s analysis indicates that there were approximately 2,000 news, gift, and speciality retail stores in the top 70 airports, giving the company’s North American business a market share of about 13%.
WHSmith is optimizing space management to grow more profitably, adding higher-margin products such as health and beauty and tech gadgets and operational efficiencies such as self-scan checkouts. The company opened new stores in Kansas City, Nashville, and Newark airports, as well as Oakland, Palm Springs, Washington Reagan, Las Vegas, and units at LaGuardia in 2021. WHSmith expects its travel retail business to represent over 70% of group revenue and around 85% of group profit by August 2023, a significant increase from 2019 when travel accounted for just 58.5% of sales.
