WHSmith is looking to sell its 500 high street stores to focus more on its travel branches – but a potential new owner would need to trade under a different brand name
WHSmith’s name is set to disappear from British high streets as the retailer focuses more on their travel shops in airports and train stations.
The retail giant has been in discussions with a range of potential buyers regarding the sale of its 500 high street stores, with interest from investment firms Alteri and Modella Capital. Other potential buyers include Hilco, who previously owned Homebase, and Doug Putman, the owner of HMV.
But if the sale is agreed, the retailer is understood to believe that it cannot have two separately owned businesses trading under the same brand. This would mean that the high street shops would begin to trade under a different name, with the brand disappearing from our towns and cities.
Established in 1792, WHSmith’s first store was opened by Henry Walton Smith and his wife Anna in Little Grosvenor Street in London. Then, WHSmith opened its first travel retail store at London’s Euston station in 1848.
According to The Times, a change in the brand’s name for its high street shops could “raise concerns that the retail group is seeking to distance itself from any fallout from the sale and prompt questions about the long-term future of many stores.” Potential buyers would then be given a timeframe under which they would need to change the brand name.
The newspaper reported that WHSmith’s high street stores have an average lease length of just two years, meaning that many underperforming locations could be quickly closed under a new owner. Of those stores, almost 200 also contain a Post Office. A source close to WHSmith said bidders were attracted to the retailer due to its strength across multiple product categories, as well as its “hub of the high street” strategy.
Retail expert Richard Hyman, of Aria Intelligent Solutions consultancy, said: “WHSmith has a very disparate product offering and the brand name has been the glue that has held it together – without that it’s going to be very difficult [for a new buyer].” WHSmith revealed underlying pre-tax profits of £166million for the year ending August 31, a significant rise from last year’s £143m. Profits from its shops located in railway stations, airports and hospitals worldwide saw a 15 per cent surge to £189m, with UK-based stores experiencing a fifth of this growth.
Despite a two per cent drop in like-for-like sales, earnings remained steady at £32m in its traditional high street business due to cost-saving measures. WHSmith is focusing on expanding its travel shops across North America, with approximately 60 new stores in the pipeline and bids to acquire another 15 in major US airports.
The firm also continues to grow its UK travel chain, having opened 14 sites over the past financial year, with plans to open three to eight more in the coming year. However, it has reduced its UK high street division, closing 14 sites and leaving 500 remaining. The company stated that it has around 470 store leases up for renewal over the next three years, including 100 where active negotiations with landlords are underway.
“We only renew a lease where we are confident of delivering economic value over the life of that lease,” the firm said. WHSmith added: “As we grow travel, the high street division will become a smaller part of the overall group.”
