Sale Overview

WH Smith has announced the sale of all 480 of its high street stores to the investment firm Modella Capital for £76 million. Notably, the iconic WH Smith brand will remain with the WH Smith Group, as this transaction only includes the high street operations.

Strategic Rationale Behind the Sale

WH Smith’s decision to divest its high street segment stems from a shift in its overall business focus. The latest fiscal year showed that approximately 75% of revenue and 85% of trading profits originated from its travel sector, which operates 1,200 stores across 32 countries. This segment of the business will continue under the WH Smith name.

The WH Smith management pointed to a strategic plan aimed at enhancing travel operations, underscoring four primary goals:

• Increasing spend per passenger
• Optimizing space utilization
• Expanding in new and existing markets
• Growing passenger numbers

New Branding as TGJones

The stores will undergo a rebranding process to become TGJones, a name that pays tribute to the company’s historical roots, founded by Henry Walton Smith and his wife Anna in London in 1792. Initially, the high-street stores will operate under the WH Smith brand during a transitional period before fully adopting the new name.

Leadership and Future Prospects

Sean Toal, the current CEO of WH Smith’s high street business, will lead TGJones following the sale. Toal expressed optimism about the future, stating he is pleased with the transition to Modella Capital, believing they will be supportive owners. He highlighted the achievements of the high street team and the potential for growth and innovation ahead.

Feedback from the Industry

Carl Cowling, WH Smith’s Chief Executive, remarked that this major change marks a significant milestone as the company narrows its focus solely on the travel retail market. He emphasized the company’s strategy to strengthen its position in lucrative global markets, particularly in North America.

Meryl Halls, Managing Director of the Booksellers Association, expressed sadness over the departure of a historic brand from the high street but conveyed a commitment to work with TGJones to continue promoting access to books in communities previously served by WH Smith. She also called for governmental support in revitalizing high street retail through investment and sustainable initiatives.