WH Smith explores sale of high street arm

WH Smith has confirmed that it is exploring the potential sale of its high street stores as it looks to restructure the business, which has seen its Travel business continue to outperform high street outlets in recent years.Over the weekend, Sky News reported that the retailer has been in negotiations with a number of prospective buyers for several weeks.

Although the identities of the potential buyers are still unclear, bankers at Greenhill have reportedly been appointed to manage the sale process, with a deal expected in the coming months, according to Sky.

In a statement released today, WH Smith said: “WHSmith confirms that it is exploring potential strategic options for this profitable and cash generative part of the group, including a possible sale.  

“Over the past decade, WHSmith has become a focused global travel retailer. The group’s Travel business has over 1,200 stores across 32 countries, and three-quarters of the group’s revenue and 85% of its trading profit comes from the Travel business.” 

It added that there can be “no certainty that any agreement will be reached, and further updates will be provided as and when appropriate”.

It comes as high street profits for the retailer fell by 9% to £39m for the year ended 31 August, which the group said was “in line” with expectations. 

By the end of the year, the high street business operated from 500 stores, while there were 1,200 travel outlets in total. 

Total group revenue for the year was up 7% at £1.9bn however, with a “strong” performance across the retailer’s travel, air, hospital and rail segments, while profit before tax increased by 16% to £166m.

The travel business now accounts for 75% of the company’s revenue, and 85% of profits.

During the year, WHSmith opened 14 new stores in the UK, including three at airports, six in hospitals and five in rail.