Uncertainty for WH Smith high street shops as private equity firms ponder deal
Uncertainty for WH Smith high street shops as private equity firms ponder deal
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Thousands of WH Smith workers face uncertainty as private equity suitors eye a deal to take control of the retailer’s high street shops. It comes after the historic UK business confirmed over the weekend that it has held talks over potentially selling its 500-strong high street store business.
The company said it is assessing options for the division as it seeks to focus on its larger travel operation. It is understood private equity groups Hilco and Alteri are among parties to raise interest over a possible takeover move for the business, after WH Smith launched the process late last year.
Both Hilco and Alteri have experience in UK retail as turnaround specialists. However, this may raise concerns among some workers over what a private equity takeover deal would mean for the future of the WH Smith high street estate and roughly 5,000 workers.
Peel Hunt analyst, Jonathan Pritchard, said that while there is limited scope for a new owner to cut jobs in an efficiency drive, some could consider further store closures. He said: “It is hardly as though this is a fat business, with lots of inefficient processes and store staff dossing about. Quite the opposite.
“Store closures could be material in somebody else’s hands, but WH Smith itself, clearly, has a good line of site on how to get the most out of the chain, and it is unlikely that anyone else has the silver bullet to regalvanise profitability here.”.
