WH Smith: Why now is an ‘odd time’ to sell and what the future holds for its high street stores
WH Smith: Why now is an ‘odd time’ to sell and what the future holds for its high street stores
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The high street store may disappear but the brand itself will still be firmly on display - in airports, train stations and more. After 230 years, WH Smith may be taking its first significant step away from the UK high street. The retailer, which operates nearly 500 high street shops, has confirmed it is exploring a possible sale of this part of its business.
“WH Smith confirms that it is exploring potential strategic options for this profitable and cash-generative part of the group, including a possible sale,” the company said in a statement. But while the phrasing is optimistic, the timing has raised eyebrows, given the economic challenges facing the retail sector.
WH Smith’s high street stores contribute just 15 per cent of the group’s overall profit, with the far more lucrative travel retail side — its shops in airports, train stations, and hospitals — driving its success. This travel arm, which boasts over 1,200 stores, is not included in the potential sale. Early reports suggest the WH Smith name would remain on these travel outlets, even if the high street stores are sold.
But what comes next for the high street stores, and indeed will there be a sale? WH Smith said there was “no certainty” of one and market conditions are far from ideal for an easy deal. “The timing looks odd regarding a potential sale of WH Smith’s UK high street operations. It has hoisted the ‘for sale’ flag precisely as the retail sector is entering a downturn, led by a cautious consumer and a rise in costs thanks to Rachel Reeves’ Budget decisions,” Russ Mould, investment director at AJ Bell explained.
