Two bidders remain in running for WH Smith high street arm
Reports were first confirmed that WH Smith was exploring a sale back in January as it looked to restructure the business, which has seen its Travel business continue to outperform high street outlets in recent years
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Only two firms reportedly remain in the running to acquire WH Smith’s high street business, with a possible decision coming sometime this spring, according to Sky News.
The news outlet revealed that Alteri Investors, which owns Bensons for Beds, and the Hobbycraft and The Original Factory Shop owner Modello Capital are the two remaining parties vying to seal a deal for WH Smith’s portfolio of over 500 high street stores.
It is thought that HMV owner Doug Pitman is no longer in talks with WH Smith banker Greenhill, although sources claimed that it has not been ruled out he could return with a new offer.
Reports were first confirmed that WH Smith was exploring a sale back in January as it looked to restructure the business, which has seen its Travel arm continue to outperform high street outlets in recent years.
At the time, the company 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 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.
It is thought any deal to offload its high street stores could come as early as when it announces its interim results in April.
