The events of September 11, 2001, and the decline in travel that followed drove sales down 12%, to £216 million ($337 million), in WH Smith's U.S. retail business for the year ended August 31, 2002, and the division had an operating loss of £16 million, compared to earnings of £11 million in fiscal 2001. The company has ruled out disposing of its American arm, but will limit investment in its hotel bookstores.
During the year, hotel store sales in the U.S. fell 19% and, in an effort to minimize losses, WH Smith closed 39 hotel stores, leaving 354 hotel outlets. Sales through the company's 174 airport stores fell 8%. The company said it expects to significantly reduce losses in the U.S. retail group in the current year, although it was not certain if the group will move back into the black in the year.
The U.K. retail market was relatively buoyant, with sales up 6%, to £1.50 billion, and profit up 7%, to £97 million. WH Smith's publishing business, under Hodder Headline, was also performing well, with sales up 5%, to £138 million, and profits up 19%, to £19 million. The story was not so good for its online activities, where sales fell from £8 million in fiscal 2001 to £6 million last year.
