In a dramatic turn of events for the British high street, WH Smith's chief executive Carl Cowling has stepped down with immediate effect, triggering an unexpected stock market surge for the struggling retailer.
Damning Audit Uncovers Critical Flaws
The resignation follows a scathing independent audit report conducted by Deloitte, which uncovered significant deficiencies within WH Smith's North America division. The review, commissioned after the company identified a major overstatement in supplier income, revealed insufficient systems, controls and review procedures for supplier income across commercial and finance functions.
Further investigation highlighted weaknesses in the composition of the finance team and inconsistent accounting practices specifically within the North American operations. This admission had previously caused WH Smith shares to tumble, with the stock sinking by almost 50 per cent since the start of the year.
Leadership Fallout and Market Reaction
In a move that stunned market observers, WH Smith's share price jumped more than six per cent immediately after Cowling announced his departure. This paradoxical surge highlights the market's loss of confidence in his leadership following the audit revelations.
Cowling did not attempt to avoid responsibility for the situation. In an official statement, he acknowledged: "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."
The departure marks a significant moment for the FTSE 100 retailer, which now faces the dual challenge of restoring financial integrity and appointing new leadership to steer its recovery.
