IT change cuts Smith’s £7m shrinkage bill

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WH Smith has reduced its shrinkage from £7m a year to £700,000 a year, by making changes to its IT infrastructure.

Speaking at a recent SAP conference, Chris Gibbons, general manager of newsworks, WH Smith News Distribution, said: “In 1996, we were the largest wholesaler in the UK but we were also the worst performing.” He said that the company which holds a market share of around 40 per cent, had been “quite arrogant” in its approach.

WH Smith began implementing SAP software in 1997 and completed the roll-out in 2001. Gibbons said WH Smith pumped a year’s profit into the company’s IT infrastructure and had achieved a decreased shrinkage from £7m per year to less than £700,000 per year.

“We currently have about 50 warehouses around the country and distribute around 2,500 different magazine titles to about 22,000 retailers everyday of the week. We handle about 56 million items a week.”

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