There has been a shocking turn of events in the timeline of the well-known high street retailer, WH Smith in recent weeks. An unfortunate error in the North American division of the company has resulted in an enormous 42% drop in the trusted bookshop WH Smith’s share price.
How Did This Happen?
The error on the North American side of the business appears to have involved over-stated supplier income, meaning that the overall profit forecasted for the North American side of the business has dropped from £55 million to a much lower £25 million. As a result, confidence appears to have plummeted.
The share price dropped an unbelievable £600 million off the market cap in total, with individual shares sitting around the 640p mark following the incident.
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What Next?
Deloitte, which is one of the world’s biggest accountancy and audit firms according to Business Insider, has been given instructions to undertake a full review of the error and the circumstances surrounding it so that lessons can be learned about what went wrong and how such an event can be avoided in the future.
While this has not been a great year for the retailer, which specialises in selling books, stationery, newspapers and magazines, it appears that the North American division still plans to push ahead with an aggressive rollout of further stores – if, of course, investors have the confidence to continue.
