It was revealed in January that the retailer had been in talks for some time to sell the High Street arm and concentrate on its more lucrative worldwide Travel side of stores in airports, railways stations and hospitals, and it’s now understood CEO executive Carl Cowling thinks it not sensible to have two businesses with the same name.
The company was founded by Henry Walton Smith in 1792, with his youngest son William Henry taking over and the firm became WH Smith & Son in 1846 when his own son with the same name became a partner – and they opened the first railway station news store two years later.
Although WHSmith has not confirmed the specifics of the deal, The Sunday Times said sources suggest the retailer, where greeting cards and gift wrap make up a significant chunk of sales along with stationery, books and convenience items, may no longer carry the name, but that doesn’t seem to be putting off some bidders.
The division, which turned over a £32million profit in the trading year to August 2024 from sales of £452m, received the first round of bids last week, with four now believed to be in the running.
There’s private equity giant Modella Capital, which bought The Original Factory Shop last month and, in the autumn, took on Hobbycraft, while another suitor is Alteri Investors, backed by American private equity giant Apollo Global Management.
Canadian billionaire Doug Putman, who rescued HMV out of administration in 2019, is also interested – and there’s a link there as WHS went back to selling vinyl LPs in 80 stores in October, while the music retailer has expanded its books offer with a dedicated floor at its Oxford Street flagship store.
Lastly there’s private equity firm Hilco, known for investing in distressed retail, which placed Homebase into administration late last year, and has been involved with Superdry, French Connection and Wilko, as well as Paperchase, Debenhams, HMV and Cath Kidston.
WHS has already begun a restructuring strategy, closing 17 stores by May as it looks to streamline operations and shift its footprint to more profitable locations. There are currently over 500 High Street outlets, of which more than 200 house a Post Office, and there are now dozens of Toys R Us in-store concessions too.
Most of the stores are on an average two-year lease so there are questions over whether a new owner will quickly shut those not meeting targets, particularly with the upcoming increases to minimum wage and employers’ national insurance, expected to add around £20m to the annual bill for the 5,000 staff.
