Days after WH Smith confirmed that it was looking at selling off its High Street business, the group has published figures that highlight the chain’s underperformance compared to its Travel division.
In a trading update covering the 21-week period to 25 January, WH Smith’s High Street unit saw like-for-like sales slip 3%. The group noted that it exited the Christmas trading period with a “clean stock position”, with it on track to deliver its targeted full-year cost savings of £11m.
In contrast, the Travel division, which operates stores in airports, train stations and hospitals, saw like-for-like sales increase by 6%. There was a 7% jump in the UK, a 3% rise in the US, and a 9% increase in the rest of the world.
Chief Executive Carl Cowling said the group was in “a strong position” despite economic uncertainty and maintained its forecast for “another year of good growth” in 2025.
WH Smith did not comment further on the sale process. It is said to be in talks with a handful of potential bidders, having kicked off the prospective sale process at the end of last year. A deal is expected in the coming months with Alteri, a private equity investor that focuses on retail, and Hilco, a turnaround specialist, believed to be among the interested parties.
A sell-off would allow the company to focus on its better-performing Travel division, which has over 1,200 stores across 32 countries.
Analysts have estimated that the High Street division could fetch up to £130m, although the company has cautioned that there is no certainty a deal will be reached.
WH Smith has been slashing costs in the High Street stores to improve profitability as it grapples with the shift to online shopping. The company has also been disposing of some underperforming stores in recent years, but a new owner is likely to consider further store closures in an efficiency drive to secure its future.
NAM Implications:
- The key is that the WH Smith High Street presence will be reduced in store count…
- …until it compares better with Travel.
- If ever…
