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'Colour therapy' craze helps WH Smith post rise in annual profits

Published 15/10/2015

WH Smith said demand for adult colouring books drove sales of its non-fiction books in stores
WH Smith said demand for adult colouring books drove sales of its non-fiction books in stores

Retailer WH Smith hailed the new craze for "colour therapy" sweeping the UK as it posted a rise in annual profits and cheered surging sales of colouring-in books for grown-ups.

The magazines and stationery business said demand for adult colouring books drove sales of its non-fiction books in stores, particularly in the past six months, with the trend capturing the imagination of those looking to de-stress and spend time away from looking at mobile phones and screens.

It posted an 8% lift in annual pre-tax profits to £121 million as cost savings helped offset falling sales in its high street chain, while the group's travel-based arm was once again the star performer with a 10% hike in earnings.

But WH Smith joined other retailers in highlighting the impact of the new national living wage, as it said it would cost the group between £2 million and £3 million extra a year, with a hit of more than £1 million expected in the current financial year.

It plans to limit the financial impact by making further cost savings, while also looking for other ways to bolster productivity and efficiency across the group.

It said the extra cost of the higher wage bill will represent around 0.5% of its total cost base a year, adding the high street division will mostly take the brunt of the financial impact in the current year.

The Government's living wage will see employers pay those over 25 at least £7.20 an hour from next April, rising to £9 an hour from 2020.

WH Smith said it grew trading profits in its high street arm by 2% to £59 million in the year to August 31, despite a 3% fall in like-for-like sales.

Stephen Clarke, group chief executive, said: "In our core categories of stationery and books we had a stronger second half helped by the new phenomenon of 'colour therapy' for adults."

Amazon UK recently highlighted the growing trend, when it said five of its top 10 best-sellers were adult colouring books

Colouring-in books by illustrators such as Millie Marotta and Johanna Basford were among the most popular, according to WH Smith.

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