The Business Exchange Swindon & Wiltshire Edition 44: Aug/Sept 2019 | Page 27

IN PROFILE
STEVE CLARKE
CEO
WHSMITH
How did your career
at WHSmith begin?
I joined the business as a Marketing
Director in 2004 before being promoted
to Commercial Director of high street
business. I then moved on to become
Managing Director of high street, before
being appointed as Group CEO in 2013.
What has changed in
the last 15 years?
Always stationery, never
stationary.
Ahead of the Swindon &
Wiltshire Local Enterprise
Partnership’s Business
Growth Summit in October, we
interviewed CEO of WHSmith
Steve Clarke, who will be
delivering a keynote speech on
‘Looking Beyond Digital
for Profit.’
Since Steve took over as CEO in
July 2013, shares in WHSmith
have tripled, the brand has
continued to grow and the
business is emerging in to new
markets internationally.
We met Steve to find out how
his leadership has helped
WHSmith buck the trend
and continue to thrive in a
struggling high street and
retail marketplace.
The whole marketplace has changed
with digital and online and the rise of the
supermarkets in non-food.
We’ve had at least two high street
recessions during this time; one following
the global financial crisis and another one
that we are currently going through driven
by high street footfall continuing to drop.
Despite this, WHSmith has maintained a
very stable, profitable high street business
but we have also seen the rapid growth of
our travel business. Train stations, airports
and hospitals (all of which are classed as
travel) now account for over 70% of our
profit. 15 years ago, this would have been
about 30%. The other key thing for us is that
we have gone international. 15 years ago
we didn’t have any stores outside of the UK
other than one in Paris. Now we’ve got over
400 stores in 30 countries across the globe.
Are you worried about
the effect of Brexit?
It’s hard to know, because we don’t know
what it is we should be worried about.
Someone said to me recently,
“In business, it’s possible to prepare for any
outcome. It’s just not possible to prepare for
every outcome.”
At the minute, we seem to be trying
to prepare for every possible outcome.
From that point of view it’s difficult. I don’t
think Brexit has got any nasty surprises,
specifically for WHSmith. I think the biggest
risk of Brexit for us is the impact a hard
Brexit will have on the overall economy and
the country’s growth rate.
We’ve all been living this for the last
few years. I think that we have to be very
alert to the Brexit weariness that we’re all
experiencing so that it doesn’t allow us to
sleepwalk in to just any conclusion.
We are going to have to live with the
consequences of the decision for a long
time, much longer than the three years
we’ve been waiting. We shouldn’t let our
collective exhaustion with the subject dim
our awareness to the consequences of
having a really bad outcome.
In the next two years can you
see growth for WHSmith?
We continue to see growth in all markets.
The success of the travel market is purely
dependent on two things; the number of
passengers (these are forecast to grow
throughout the UK airports in particular)
and the spend capacity that we get through
developing our format.
We have done lots of work on this. In
hospitals we sell Marks & Spencer’s Food
to Go, and we franchise Marks & Spencer’s
Food Halls and Costa Coffee. More recently
we’ve launched a new WHSmith pharmacy
format at Gatwick Airport.
What is great about
being based in Swindon?
We’ve been in Swindon since the 1960s and
we have 650 staff members. One of the nice
things about having an office in Swindon is
that we have access to a very highly skilled
and loyal workforce. We have got many
people in our office who have worked for us
for several decades.
We run high street and some group
services out of Swindon. It’s much more
economic to have an office here and it’s a
perfectly convenient location for us with the
M4 motorway and rail network.
Can you tell me more about the
culture you’ve created at WHSmith?
Internally, over the last few years we’ve
put a lot of focus on mental health and the
general wellbeing of our staff, so we’ve done
things like training up mental health first
aiders. We now have more mental health
first aiders in the company than we do
regular first aiders.
We did an initiative where every single
line manager received half a day’s training
in recognising mental health issues in the
workplace. This includes all of our store
managers which was really important to us,
because sometimes it’s easier to do these
things in an office than it is to implement
changes in remote stores.
Managers can recognise when
performance or absentee issues are more
to do with mental health problems than
anything else.
Stepping down in October, you’re
probably reflecting on your time
at WHSmith and how you’ve made
your mark on the organisation.
What are you most proud of?
In my time as CEO we’ve had six record
years of profit growth. I think what I’m most
proud of is the work that we’ve done around
mental health. I think that gives me the
biggest personal pride.
WHSmith is such a brilliant business and
it’s got such a wonderful team of people,
whether that’s in store or in the distribution
centres or in head offices. If I was really
honest I would say I’m proud of their
achievements, because nothing that has
happened at WHSmith in the time that I’ve
been here would have been possible without
the real dedication and commitment that we
have from the people in the business.
Is there a future for the high street?
We have about 600 shops on the high street,
five years ago we had about 600 shops on
the high street. 15 years ago, we had about
600 shops on the high street. We haven’t
been one of those retailers that has gone
for lots of store closures and we have main-
tained a very profitable business.
Last year was our second or third most
profitable year in the last 15 on the high
street, so we continue to do well in challeng-
ing circumstances. What I would say is, if
you look at the data, something like 22%
of non-food is purchased online. That still
means that 78% is purchased in physical
shops. Of the 22% that’s purchased online,
a lot of that is click and collect, so physical
shops are still required in order to fulfil
those orders.
I think there is a strong future for the high
street. I think it can be made stronger if the
government were to be more focused on
how they can relieve the pressure of busi-
ness rates, particularly in an environment
where footfall continues to decline. I also
think it’s incumbent on retailers to develop
strategies that will enable them to thrive,
even with footfall declining at 2 or 3% a year.
It’s not all about sales, it’s about profitable
sales.
There is no doubt that the inequities of
business rates make it much more difficult
for retailers to be successful. If you look at
the number of retail administrations and
failures over the last few years, many of
them wouldn’t have happened if they didn’t
have such onerous business rates. It is
bonkers that we are taxing retailers out of
business.
Then you look at companies like Amazon
who are absolutely dominant in the UK and
are not really paying a lot of business rates
or corporation tax. The inequalities there are
crazy and at some point the government has
to stop taxing retailers off the high street.
Over 227 years how
has WHSmith changed?
WHSmith started in 1792 as a family
business and in the early years they sold
newspapers, then as they started to expand
into train stations, they sold books and
pencils and notebooks.
So basically, all of our history, we’ve been
selling books, newspapers, magazines
and stationery and today the core of our
business is the same. We’re one of the few
businesses that’s been around for 227 years
which essentially does the same thing they
did when they were founded.
“15 years ago we didn’t have any stores outside of the UK
other than one in Paris. Now we’ve got over 400 stores in
30 countries across the globe. ”
THE BUSINESS EXCHANGE 2019
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