Swann shocks the City as she reveals she is to quit WH Smith

By SCOTT REID
Published on 11/10/2012 23:41

SHARES in WH Smith are expected to resume their upward trajectory after analysts said the retailer would be in “safe hands” following the departure of long-serving boss Kate Swann.

The group, which has some 1,200 outlets split between the high street and travel locations such as airports and railway stations, saw its shares fall 3.2 per cent yesterday. They have risen by about a fifth since the start of the year.

Investors appeared rattled by the surprise news that Swann would step down as chief executive at the end of June, after running the books and stationery stalwart for almost a decade.

One of the sector’s most respected bosses, Swann announced her departure at the same time as a 10 per cent hike in the group’s annual profits to £102 million. This compares to the £135m loss it racked up in 2004.

Since then, Swann has shifted the company’s focus away from lower-margin CDs and DVDs towards books and stationery. She has also reduced the chain’s dependence on the Christmas season.

Steve Clarke, who joined the group in 2004 and heads its high street division, is due to take over from Swann on 1 July.

Kate Calvert, a retail analyst at brokerage Seymour Pierce, said Swann had done a “fantastic job orchestrating the turnaround of WH Smith”.

She added: “This is a blow, though she is handing over to a safe pair of hands in Steve Clarke.”

Investec Securities’ analyst Bethany Hocking said she was “positive” on Clarke, and the broker left its forecasts and target price unchanged.

With trading expected to remain challenging, Swann outlined plans for a further £12m in cost savings, having cut £17m in the past financial year.