WH Smith sells UK High Street business for £76 million

LONDON: WH Smith PLC, a leading British retailer, has announced the sale of its UK High Street business to Modella Capital for an enterprise value of £76 million, creating a focused global travel retail enterprise. The transaction is expected to close by the end of the company’s fiscal year.

The sale includes cash proceeds of £52 million, with net proceeds of approximately £25 million after transaction and separation costs. These funds will be allocated according to the Group’s capital policies. Notably, the iconic WHSmith brand is excluded from the sale and will continue to represent the company’s Travel divisions in 32 countries, including UK airports, hospitals, and rail stations.

The decision aligns with WHSmith’s strategy to concentrate on its thriving Travel business, which now generates 75% of the Group’s revenue and 85% of its trading profit. The move is expected to enhance revenue growth, profit margins, and shareholder value while maintaining the Group’s robust cash flow generation.

Chief Executive Carl Cowling stated, “This is a pivotal moment for WHSmith as we become exclusively focused on Travel. While High Street remains a profitable business, the time is right for a new owner to lead it forward as we capitalize on substantial opportunities in our Travel markets.”

The High Street business, consisting of 480 stores and employing around 5,000 staff, will operate under Modella Capital’s ownership and rebrand as TGJones after a transitional period. The transaction excludes WHSmith’s online personalized greeting card brand, funkypigeon.com, which remains under review for strategic options, including a potential sale.

The deal underscores WHSmith’s commitment to driving growth in international travel retail, leveraging increasing passenger numbers and infrastructure investments in airports worldwide. With a strong balance sheet and a strategic focus, the Group aims to deliver sustainable growth and long-term shareholder returns.