Re Agreement

Smith WH PLC
3 January 2001


Statement re Proposed Industry Solution for Magazine Distribution

WH Smith PLC announces today that it has reached an agreement with
Associated Newspapers by which it has given its endorsement to the
proposed Industry Solution for magazine distribution.
As a result of this agreement, Associated Newspapers has withdrawn its
intention to terminate its distribution contract with WHSmith News.

The agreement was conditional on the three major magazine distributors
and the Newspaper Publishers Association (NPA) fully endorsing the
industry solution in writing, which has now been received.  In
addition, WHSmith is working closely with the BRC to ensure that the
eventual outcome is acceptable to BRC members.

In the light of these conditions being met and with the expectation
that a timetable for implementation will be agreed by the end of
January 2001, WHSmith has confirmed that it will suspend its national
distribution operation by 27th January 2001.

Key principles of the Industry Solution (See Notes to Editors for 8
point plan)

Central Publication Units (CPUs) will be established by wholesalers to
provide a range of services including information services, copy
management and invoicing. These will be operated either individually
or via joint arrangements with another party.  It is anticipated that
there will be at least two CPUs.

Publishers, distributors, wholesalers and retailers will agree the
scope of the CPU services and set industry standards to be met by the
wholesaler in the provision of these services. This will ensure that
for the first time retailers are fully involved in determining both
the services and performance levels of wholesalers.

Publishers, distributors and wholesalers, where appropriate, will
enter into contractual arrangements relating to the provision of CPU
services.

Wholesalers will work together with retailers, subject to agreement
with publishers and distributors, to provide more efficient
distribution within the context of existing exclusive regional
territories.

The Joint Industry Group will establish a senior level working group,
comprising representatives from all parties, to monitor the effective
implementation of this agreement on behalf of its members.

Benefits of Proposed Changes to Current Magazine Supply Chain

The Industry Solution provides the necessary framework to address the
problems inherent in the current magazine supply chain, in particular
considerable administrative costs, duplication of activity and high
levels of waste.  With the establishment of CPUs, it is anticipated
that publishers and retailers will benefit from reduced administrative
costs. In addition, the new framework will enable the industry to
reduce levels of waste significantly.

Retailers will be fully involved in determining both the services and
performance levels of wholesalers which will enable retailers to have
greater influence over the magazine supply chain, resulting in an
improved service for consumers.

Commenting today on the agreement Richard Handover, Chief Executive of
WHSmith, said:

'From the outset, we clearly stated that there were a number of key
principles within the current magazine supply chain that need to be
addressed, namely, high administrative costs, inefficient distribution
and the lack of direct commercial relationships between retailers and
publishers.   We believe that significant progress has been made
towards resolving these issues.

'For the first time the PPA have agreed that retailers will have
contractual relationships with  publishers which will enable them to
participate in the development of the magazine category and both the
planning and design of the magazine supply chain.  Through this full
involvement we will be able to achieve efficiencies in magazine
distribution and ensure improved availability for consumers.

'Now that the proposal has received full endorsement from major
magazine distributors and newspaper publishers and in the expectation
that a timetable will be put in place by the end of January, we have
agreed to suspend our national distribution operation.

'We are pleased that Associated Newspapers have withdrawn their notice
to terminate part of their contract with WHSmith News and we will
continue to work with them to ensure a swift but realistic timetable
is put together to deliver the solution.'


Enquiries to:-
Philippa Power                               0207 514 9624
WHSmith Corporate Affairs



Notes to Editors

The Industry Solution - 8 point plan

1.  Publishers/distributors will appoint wholesalers within exclusive
regional geographical territories.

2.  Where there is more than one wholesaler in an area, wholesalers
will work together with retailers, subject to publishers/distributors
agreement, to provide more efficient distribution.

3.  By agreement with publishers/distributors each regional wholesaler
will provide CPU Services for retailers covering their territories as
defined in 1.

4.  Wholesalers may provide CPU Services either individually or by
arrangement with another partner, subject to agreement with
publishers/distributors.

5.  Drawing upon the findings and outcomes of the PPA Blueprint
process, common standards and the scope of CPU Services will be
determined by publishers/distributors in agreement with wholesalers
and retailers.

6.  A senior level working group will be set up under the auspices of
JIG to monitor the progress of the above.

7.  Publishers/distributors and wholesalers where appropriate will
enter into contractual arrangements relating to agreed CPU Services.

8.  To the extent that regulatory approval is deemed appropriate, the
parties reserve the right to seek such approval.

Joint Industry Group

The Group comprises the Periodical Publishers Association (PPA),
Newspaper Publishers Association (NPA), Association of Newspaper and
Magazine Wholesalers (ANMW), the Multiple Newsagents Association (MNA)
and the National Federation of Retail Newsagents (NFRN).