WHSmith had confirmed in May that franchise retailers wouldn’t be able renew their contracts, and a long-term WHSmith Local franchisee told Better Retailing they haven’t received any support or contact since, despite their contract running until late 2020.
WHSmith Local franchisees pay around £4,000 per year in fees, while WHSmith receives commission on every item sold in store.
The source told Better Retailing: “WHSmith still get commission when we buy the products from a cash and carry, so it doesn’t matter if we sell their products.
“There is no merchandising, support or guidance. I don’t think they can hold on to their staff and our contacts are constantly changing.”
According to WHSmith’s preliminary results published last week, it decided to wind down WHSmith Local after a “detailed review”.
The results read: “We have completed a review and as a consequence have recorded a non-underlying charge of £7m (2018: £9m) in respect of restructuring of some operational activities and the managed wind-down of the WHSmith Local franchise business.”
Read more: No contract renewals for WHSmith Locals
The restructuring saw the departure of many former head office staff supporting franchisees, including the former head of WHSmith Local Kevin Whitehouse, who left in February 2018.
Better Retailing understands that WHSmith is offering retailers the opportunity to join its wholesale model once their contract runs out. However, franchisees claimed they wouldn’t be entitled to the same promotional support and said WHSmith won’t disclose pricing structures until retailers sign up.
One source added: “I need support to help me decide what to do when the contract runs out, but it is non-existent. I feel completely in the dark. I don’t know how I am going to manage after being with WHSmith for so long.”
A separate source told Better Retailing they hadn’t heard from WHSmith since the announcement: “I have contacted WHSmiths but I am still waiting to hear from them about what their proposition is.”
“They launched WHSmith Local and decided not long after that it would be discontinued, so it shows they didn’t look into it that well and haven’t invested,” the source told Better Retailing.
A WHSmith spokesperson responded: “We continue to support our WHSmith Local franchisees for their remaining term and in line with our contractual obligations. We are in discussions with franchisees as they approach the end of their term as to whether they wish to continue trading with us under a wholesale agreement.”
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