The WHSmith name is set to disappear from the UK’s high streets after WH Smith Plc agreed to sell its high street business to Modella Capital for £76m.
The WHSmith brand is not included in the sale and WH Smith Plc’s travel division will continue to trade under the brand name across major airport locations, hospitals and train stations in 32 countries.
WH Smith Plc put its high street business up for sale earlier this year so that it could focus on its travel business, which generates 75% of the group’s revenue and 85% of its trading profit.
The high street business, which comprises a portfolio of circa 480 stores, is currently profitable and cash generative and all of the stores, colleagues, assets and liabilities of the business will now move under Modella Capital’s ownership.
The high street business, which will continue to be led by current CEO Sean Toal, will operate for a short transitional period under the WHSmith brand and then the business will be rebranded as TGJones.
Carl Cowling, group chief executive of WH Smith Plc, said: “As we continue to deliver on our strategic ambition to become the leading global travel retailer, this is a pivotal moment for WHSmith as we become a business exclusively focused on travel. We have a highly successful travel business, operating in fast growing markets in 32 countries and we are constantly innovating to deliver strong returns and meet our customers’ and partners’ needs.
“Our travel business currently accounts for around 75% of the group’s revenue and 85% of its trading profit. With the ongoing strength in our UK travel division, and the scale of the growth opportunities in both North America and the rest of the world, we are in our strongest ever position to deliver enhanced growth as we move forward as a pure play travel retailer.
“As our travel business has grown, our UK high street business has become a much smaller part of the WHSmith group. High street is a good business; it is profitable and cash generative with an experienced and high-performing management team. However, given our rapid international growth, now is the right time for a new owner to take the high street business forward and for the WHSmith leadership team to focus exclusively on our travel business. I wish the high street team every success.
“As we look forward as a simplified, travel-focused group, I am excited about the group’s future prospects. With a clear strategy, a strong balance sheet, and operations in high growth and attractive markets, we are well-positioned to generate substantial growth and value for all stakeholders.”
Greenhill & Co International and Herbert Smith Freehills are acting as financial adviser and legal adviser to WH Smith Plc on the transaction.
