Tightening of purse strings 'could benefit WH Smith shareholders'

While a slowdown in consumer spending could be seen as bad news among those with stocks and shares in the retail sector, it could actually herald a merry Christmas for WH Smith's shareholders.

The retailer is predicting that many consumers will abandon expensive gift plans as the credit crunch works its way down the food chain, opting instead to buy cheaper items such as books.

"Given the current consumer environment, we are expecting a competitive Christmas," said Kate Swann, chief executive at WH Smith.

According to the Times, the stationary store has announced a 15 per cent increase in full-year profits of 15 per cent to £76 million.

For shareholders, that spelt good news. At the close of trading last night, shares were valued at 347p - a rise of 8.4 per cent.

Another retail giant, Sainsbury's, saw a ten per cent share owned by property tycoon Robert Tchen-guiz sold this week.

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