Major Leadership Shakeup at WH Smith
High street stalwart WH Smith has been rocked by a significant accounting scandal, leading to the immediate departure of its chief executive, Carl Cowling. The crisis emerged from serious financial discrepancies within the company's North American operations, forcing a drastic revision of the group's profit outlook.
The Accounting Failure and Its Immediate Fallout
An independent review conducted by Deloitte uncovered substantial accounting failures in WH Smith's North American division. The investigation revealed that supplier income had been exaggerated, leading to profits at the US branch being overstated by as much as £50 million.
This discovery had an immediate and severe impact on the company's financial standing. In August, WH Smith was compelled to slash its profit forecast, a move that resulted in a staggering £600 million being wiped off the firm's market value. The company's shares plummeted by 42% following the announcement and have yet to recover.
Leadership Changes and Corporate Apology
In response to the findings, Carl Cowling resigned from his position as group CEO with immediate effect. In a statement, Mr Cowling acknowledged the gravity of the situation, stating: "Whilst the issues identified in the Deloitte review arose in our North American division, I recognise the seriousness of this situation and as group CEO feel it is only right that I step down from my position."
He will remain employed by WH Smith until the end of February to ensure an efficient handover. Andrew Harrison, the current UK chief executive, has been appointed as interim CEO while the company searches for a permanent replacement.
WH Smith Chair Annette Court issued a public apology, confirming the company recognises "the importance of strengthening controls, governance and reporting procedures across the group." She added: "Our priority now is to rebuild trust and credibility and to improve the performance and profitability of our North America division."
Systemic Weaknesses and The Path Forward
The Deloitte review identified deeper systemic issues beyond the immediate accounting errors. The analysis found significant weaknesses in the company's financial controls, including insufficient systems and inadequate review procedures for supplier income within WH Smith's commercial and finance teams.
Ms Court expressed confidence that the actions being implemented would "ensure a strong foundation for the business going forward," signalling a comprehensive overhaul of financial governance and reporting procedures across the entire WH Smith group.
