Tough task for new WH Smith chief

KATE Swann faces an even tougher job when she takes over as chief executive of WH Smith later this year, with the troubled books and magazines retailer warning today that profits from its core High Street business will fall below expectations.

The shares slid 25p to 352p as current chief executive Richard Handover said second-half sales in the UK retail operations will be flat, reflecting what he calls the 'highly competitive' environment, together with the hot weather, which has kept people out of the shops.

Books, stationery and news will produce 'satisfactory' contributions but margins have fallen on the entertainment side while the UK travel operation has been hit by the impact of the Iraq war and the Sars epidemic.

The group is continuing to review all options on its troubled US travel business and says it will be in a position to update the market 'in the near future'.

But there was no news on a starting date for Swann, who has been poached from catalogue showrooms chain Argos, part of the GUS empire.

Her appointment was announced in July and Argos could keep her until the end of the year, although Handover is hoping she will be released earlier.

Swann will be paid £475,000 a year but could take that to nearer £1m with bonuses.