The book retailer's sales may have tumbled sharply at the end of 2006, but as the Independent reports, the City was unperturbed because of a sharp improvement in profit margins. Seymour Pierce analyst Richard Ratner said the trading statement was "overall much as expected". He added: "Kate Swann [WHSmith CEO] has done a great job but at some stage she has to get top line moving. Equally, the current performance is a massive indictment on the mismanagement of WH Smith's retail arm for the last decade or longer."

Swann said: "In a competitive period on the high street, we continued to deliver our strategy to improve profitability. We increased the pace at which we are rebalancing the mix of our business towards our core categories." Still, Swann added that the company remained cautious about the outlook for consumer spending. And then there's the other news that the Telegraph reported, which is that the company is facing attack for its pension plan changes. Some 1,800 staff at the retailer are to lose their generous final salary pension benefits under a proposal made earlier this month, and unions have accused the company of using changes to its pension scheme as a cynical means of cutting costs.