WHSmith's Crisis Deepens: CEO Carl Cowling Resigns Amid Accounting Scandal
A dramatic turn of events has unfolded at WHSmith, a UK-based travel retailer, as its CEO, Carl Cowling, has stepped down following a serious accounting scandal. The news comes on the heels of an independent review by Deloitte, which revealed a "target-driven performance culture," weak financial oversight in North America, and a decentralized divisional structure as contributing factors to the overstatement of profits.
In August, WHSmith announced expected North American trading profits of around £25 million, only to later revise down its profit projections. The company's stock took a hit, with shares plummeting 5% after Cowling's departure was announced. However, the news still managed to spark some optimism, as investors welcomed the move and watched as the stock price rebounded by 5% in the following days.
Cowling will remain employed by WHSmith until February 2024 to ensure a smooth transition of his duties. His resignation marks the beginning of a long road for the company to regain market confidence.
New Interim CEO Takes the Helm
Andrew Harrison, the CEO of WHSmith's UK division, has taken over as interim group CEO, with a formal search process already underway to find Cowling's permanent successor. A seasoned executive with 15 years of experience at Manchester Airports Group, Harrison brings a wealth of knowledge in commercial and operational management.
The new leadership is tasked with implementing a comprehensive remediation plan for North America, which will also oversee the company's next phase of strategy as a pure global travel retailer.
Accounting Review Reveals Systemic Issues
Deloitte's review highlighted three key factors that contributed to the overstatement of profits: a "target-driven performance culture," weak financial oversight in North America, and a decentralized divisional structure. The accounting treatment for supplier income in the North American division was also found to be inconsistent with the company's overarching accounting policy.
In addition, Deloitte further revised down WHSmith's profit projections for FY25, reducing headline trading profits from £55 million to £5-£15 million.
Company Chair Annette Court acknowledged that the issues were "extremely serious" and apologized for the shortcomings. She pledged that the company would reinforce financial discipline and integrity moving forward.
A New Era for WHSmith
As the company navigates this crisis, investors will be watching closely to see who takes over as CEO and how effectively they implement the remediation plan. The new leader will need to address systemic issues and restore trust with stakeholders, all while navigating the next phase of WHSmith's strategy as a global travel retailer.
A dramatic turn of events has unfolded at WHSmith, a UK-based travel retailer, as its CEO, Carl Cowling, has stepped down following a serious accounting scandal. The news comes on the heels of an independent review by Deloitte, which revealed a "target-driven performance culture," weak financial oversight in North America, and a decentralized divisional structure as contributing factors to the overstatement of profits.
In August, WHSmith announced expected North American trading profits of around £25 million, only to later revise down its profit projections. The company's stock took a hit, with shares plummeting 5% after Cowling's departure was announced. However, the news still managed to spark some optimism, as investors welcomed the move and watched as the stock price rebounded by 5% in the following days.
Cowling will remain employed by WHSmith until February 2024 to ensure a smooth transition of his duties. His resignation marks the beginning of a long road for the company to regain market confidence.
New Interim CEO Takes the Helm
Andrew Harrison, the CEO of WHSmith's UK division, has taken over as interim group CEO, with a formal search process already underway to find Cowling's permanent successor. A seasoned executive with 15 years of experience at Manchester Airports Group, Harrison brings a wealth of knowledge in commercial and operational management.
The new leadership is tasked with implementing a comprehensive remediation plan for North America, which will also oversee the company's next phase of strategy as a pure global travel retailer.
Accounting Review Reveals Systemic Issues
Deloitte's review highlighted three key factors that contributed to the overstatement of profits: a "target-driven performance culture," weak financial oversight in North America, and a decentralized divisional structure. The accounting treatment for supplier income in the North American division was also found to be inconsistent with the company's overarching accounting policy.
In addition, Deloitte further revised down WHSmith's profit projections for FY25, reducing headline trading profits from £55 million to £5-£15 million.
Company Chair Annette Court acknowledged that the issues were "extremely serious" and apologized for the shortcomings. She pledged that the company would reinforce financial discipline and integrity moving forward.
A New Era for WHSmith
As the company navigates this crisis, investors will be watching closely to see who takes over as CEO and how effectively they implement the remediation plan. The new leader will need to address systemic issues and restore trust with stakeholders, all while navigating the next phase of WHSmith's strategy as a global travel retailer.
... like, can't these execs just do their job without messing it up? anyway, so Carl Cowling is out and some new dude Andrew Harrison is in 
... sounds like they're trying to clean up the mess, but I'm skeptical 
. Deloitte's report is all about how they messed up their accounting treatment for supplier income 
... yeah, no kidding, that sounds super shady 
. on the bright side, Annette Court is owning her mistakes and promising to do better 
... let's see if that actually happens 
.
anyway, new interim CEO andrew harrison seems solid so fingers crossed he can fix whsmiths financials & get the company back on track 
whsmith is in deep trouble now 
their CEO just resigned due to an accounting scandal and it's going to be a long road to recovery 
at least they're being transparent about it, the new interim CEO has already started working on a remediation plan 
but i'm still worried about how this will affect their stock price 
hopefully they can get some fresh blood in soon 
.
. Can't we just say it like it is and call them out for being incompetent? 
And Annette Court's apology feels a bit insincere to me... 
I mean, what exactly does she have to be sorry about? The company made some mistakes, yeah, but they're not all bad. It's time for some real change and accountability 
.
. But hey, at least the stock price rebounded a bit after Cowling left 
dude, whsmiths is in so much trouble 
, i mean, their ceo just quits over an accounting scandal, what a mess 
. idk about this remediation plan tho, sounds like they need to get their house in order before they even think about trying to sell or do anything 
.
. Just somethin' to think about, I guess 
. Can't wait to see who they pick as the new CEO, though - hopefully someone with experience in North America 
...
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... or is it? Maybe Cowling was just setting up Andrew Harrison for success? 
. The thing that really gets me though is how Deloitte found systemic issues in the company's structure and accounting treatment 
but on the bright side, new ceo andrew harrison has some solid experience under his belt 
also gotta give props to deloitte for digging deep into their accounting practices 
stats show that whsmith's profit projections were way off - 55 million to 5-15 million? 
what's going on over there? 
whsmith needs a solid remediation plan and a new leader who can bring some stability 
their accounting scandal sounds super suspicious. it makes me wonder how many ppl got affected by this 
anyway seriously though it's crazy how one bad review can affect a company's stock price so much and i feel for the employees who have to deal with this drama and now there's some new interim CEO trying to fix everything which is cool but i'm curious about what's gonna happen next