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Posts Tagged ‘Kate Swann’

Harry Potter and the Continuing Price Wars

The news is surprising, even a slap in the face to hear, but wholly unexpected. The Times reports that HMV boss Simon Fox has warned investors that the seeming cash cow known as HARRY POTTER AND THE DEATHLY HALLOWS is really far, far from that. Even though Waterstone’s had already sold nearly as many by preorder as were sold in total of the sixth Harry Potter book, because Fox said it was vitally important for the bookstore chain to offer the book at a competitive price – and so Harry 7 will be on sale for 8.99 pounds, roughly half the cover price – it would be “hard to make money”. Fox added that “if we try to be anything other than half price we are setting the Waterstone’s brand off as high price and that’s something we are trying to change.”

Fox’s comments reflect the fears of Kate Swann, the chief executive of WH Smith, and Philip Downer, the retail director of Borders. “Harry Potter will help sales but looking at the current offers we are not expecting it to help profits,” said Swann, while Downer added that “[July 21] will be a terrific evening of parties and events but we don’t expect to make any money from Harry Potter. The book will be available more cheaply from the supermarkets who treat it as a loss leader.” As the high street prepares for a Harry Potter price war with the supermarkets and online stores such as Amazon, which is already offering the book for 8.99 pounds. Asda and Tesco will deliver the Bloomsbury publication for 12p less, plus postage and packing. The retailers admit that the preorder price may fall to a 55 per cent discount closer to the publication date.

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WHSmith eyes Borders Airport Stores

What with Borders‘ recent announcement that it will shutter all of its UK-based shops, <em>the Scotsman reports that WHSmith has its eye on the airport shops even as he market awaits a bid from retail entrepreneur Tim Waterstone for the whole group. City analysts say that although the Office of Fair Trading would block any move for Borders outright from WH Smith, its airport shops are a licence to print money and chief executive Kate Swann will be interested. Nick Bubb, retail analyst at Pali International, said: “WH Smith will definitely be looking at part of it, especially the airport stores and possibly the out-of-town stores. I would be surprised if they are not trawling over it [Borders] this weekend.”

As for Waterstone, he’s in talks with Mothercare to sell his Early Learning Centre toy chain for an estimated 85 million pounds, which might then be used to try buying out Borders – or at least, try something along those lines, even if Seymour Pierce analyst Richard Ratner dismissed the notion as “wishful thinking”.

Analysts Optimistic about WHSmith fortunes

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.

WHSmith Had Itself a Dismal Little Christmas

WHSmith revealed that sales at its 540 High Street shops were down 8% in off almost 10% over a 20-week period as it shifted away from high-selling low-margin CDs and DVDs and tried to get back to its core books and stationery sales. The figures were almost twice as bad as the company’s direct competitors such as Woolworths, where sales fell 4.6%, and far worse than HMV, even though the music retailer had issued a profits warning shortly beforehand.

Chief executive Kate Swann put the blame on a competitive period on the High Street. However, she added: ‘We continue to deliver our strategy to improve profitability.’ She said that profit margins were up by three percentage points. ‘Our profit has doubled. Our plan has never been to grow top-line sales, so to say this is a shocker would be very misleading,’ she said. Which is a nice way of spinning really bad news…