January 15-31, 2004 Edition

WH Smith Girds for Lower

Sales and Profits in 2004

LONDON/1/2/04—WH Smith has warned shareholders to expect lower sales and profits in the year ahead, and said it may even be forced to lay off some workers. The unwelcomed announcement resulted in a 20 percent drop in share prices, but stocks have since recovered considerably.

Comparative retail sales during the busy Christmas season were flat and profit margins significantly declined in the company’s books and entertainment units. The predicted full-year profits of between £90m and £100m are now expected to be 20 percent lower than expected.

Group Chief executive Kate Swann will take over the UK retail division managed by Beverley Hodson, who is leaving the company.

The company has launched a thorough operational and financial review of operations, including an overhead review at the Swindon and London offices.

WHSmith is also considering possible job cuts among its 31,000 workers.