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WH Smith: threadbare carpets but shag-pile profits?

Whether or not investors can find a link between performance and carpet threadbare-ness, the often-hilarious @WHS_Carpet twitter account remains one for the social media watchlist

WH Smith PLC -

WH Smith PLC’s (LON:SMWH) shops are such a frequent object of ridicule that there is a twitter account that provides almost daily ridicule of the threadbare carpets, empty shelves and Christmas promotional displays still prominent in mid-summer.

Strange so, that the company has had a great reputation among investors and analysts over the past decade, where the shares have soared more than fourfold.

The state of the stores and the market reaction is a product of the ‘managed decline’ of the UK high street business that was put in place by boss Kate Swann as part of her nine-year turnaround of the group.

Swann's other genius move as part of her wider overhaul of the company was to start putting more outlets and concessions into airports and railway stations, forming the The travel business.

After she swanned off to rightful acclaim in 2012, the baton was picked up and carried with gusto by Steve Clarke, previously managing director of the High Street business.

Under Swann the financial improvement was impressive but the share price never fully rewarded her turnaround, while under Clarke the shares have been as plush as a shag pile carpet, up more than 200% while the store carpets have become ever more threadbare.

This year, in fact WH Smith was voted the worst retailer in the UK for the second year in a row as part of a nationwide survey by Which, disparaged for its poor value for money, customer service and in-store experience.

With Clarke’s own exit pencilled in for October, after 15 years at the company and six in the top job, the company again is promoting the boss of the High Street business to the CEO role, this time he goes by the name of Carl Cowling.

This year, photos of haphazard displays, misspelt price labels, dust-filled corners and wonky shelves continue to flow merrily on, but Wednesday’s trading update for the year to end-August indicated sales across its airports, stations and hospitals were all pretty good.

So, whether or not investors can derive a link between performance and carpet tattiness, the acerbic stream from the @WHS_Carpet twitter account - plus many contributions from its loyal followers - remains one for the social media watchlist.

Quick facts: WH Smith PLC

Price: 1630 GBX

Market: LSE
Market Cap: £2.13 billion

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