WH Smith sells high street stores to focus on travel retail strategy
- WH Smith has sold its high street division to Modella Capital for approximately £76 million.
- The sale is part of WH Smith's strategy to focus on the growing travel retail market.
- Investors are eager for an update on the company's future outlook following this significant change.
In the UK, WH Smith has undergone significant changes in its retail strategy, marked by the sale of its high street division. This sale was finalized recently, with Modella Capital acquiring the stores for around £76 million. The transaction reflects WH Smith's strategic ambition to position itself as a leading global travel retailer, especially as its travel stores have started to generate the bulk of the company's sales and profits. With over 1,200 travel stores across 32 countries, this pivot is aimed at capitalizing on the growing market for travel retail. On April 16, 2025, WH Smith is set to update shareholders on its trading performance for the past six months. This update will be the first major communication following the recent sale. The high street arm, which comprised 480 stores and employed around 5,000 staff, will be rebranded as TGJones under the new ownership. Investors are keen to understand how this move will influence the company’s future growth and profit margins. Despite the strategic sale, WH Smith's share value dropped recently, reaching its lowest point since 2020. The retailer is also grappling with external issues, such as the impact of US tariffs on its operations, as approximately 28% of its sales and 30% of its profits are sourced from the US market. Analysts anticipate that any resultant cost increases may lead to higher prices for consumers, which shareholders will be particularly focused on during the upcoming trading update. They would be looking for guidance on how the company plans to manage the pressures exerted by macro-economic factors like slowed traveler numbers. Despite the challenges, analysts expect a recovery in profits in the second half of the fiscal year, particularly due to the seasonal boost from increased airport travel. The upcoming financial update will shed light on WH Smith’s plans for mitigating cost pressures and how it intends to navigate the changing retail landscape effectively. Overall, the company’s commitment to a travel-focused strategy marks a decisive shift from traditional retail models and reflects the broader trends in consumer behavior influencing the retail sector today.