Market watch: Tale of woe for WH Smith as celebrity biographies flop

WH SMITH and Carphone Warehouse will provide further insight into the retail sector’s Christmas performance this week after figures showed discounting managed to entice cash-strapped customers into shops.

So far, the sector has been a tale with clear winners and losers and Carphone Warehouse will be hoping to rejoin the ranks of the former after calling time on its ambitions in the UK white goods and electronics market.

The firm is winding up its Best Buy joint venture after losses of £46.7 million in the six months to September, and the City will be looking for further details on the operational and financial impact of closing the Best Buy stores. Elsewhere, Carphone Warehouse is expected to report ongoing strong sales of smartphones.

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WH Smith is tipped to reveal a further drop in sales on Wednesday as its stores are likely to have struggled to shift a poor selection of celebrity biographies.

Experts from Oriel Securities said a line-up featuring Apple founder Steve Jobs, comedian Lee Evans, footballer Paul Scholes and actress Joanna Lumley did not amount to a “strong Christmas schedule” and would have hurt sales compared with a year before.

Analysts said like-for-like sales at WH Smith’s high street operation were likely to be down 6 per cent during the 21 weeks to 22 January, while trading in the travel side of the company at train stations, airports and motorway service areas is expected to have dropped 4 per cent.

Despite that, analysts remain positive as targets for cost savings and gross margin gains should be confirmed.

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