US poops the party at WH Smith

SALES at WH Smith's 600 US airport and hotel shops plunged by a fifth in the 20 weeks to 19 January following the 11 September terrorist attacks and downturn in the American economy.

The group will close 19 hotel stores immediately and others will follow. That took the edge off a strong Christmas in Smith's British High Street stores which pushed sales up by 8% in the six-week festive trading season and 7% on a like-for-like basis for the 20 weeks.

New stores added a further 2% to sales but chief executive Richard Handover said booming sales of DVDs such as Bridget Jones's Diary and Shrek along with games for PlayStations and Gameboys rather than stationery meant gross margins were a point lower at 38%.

'It was a real entertainment Christmas,' he said. 'The emphasis was on multimedia with entertainment sales up by 13%, books up by 6% and stationery flat. We expect the mix to move back towards highermargin categories towards the end of the year.'

The US stores accounted for only 9% of Smith's sales and profits last year but the downturn has been so sharp that the business made a trading loss of £10m in the first 20 weeks compared with a profit of £10m for the whole of last year.