WH Smith is presently engaged in discussions to sell its high street division, focusing on growing its lucrative travel retail sector. The iconic British retailer, worth an estimated £1.5bn, sees its high street stores – a network of about 500 locations employing roughly 5,000 staff – as potential divestment opportunities, confirming in an official statement, "WH Smith confirms that it is exploring potential strategic options for this profitable and cash generative part of the group, including a possible sale,".
This news follows an initial report by Sky News' Mark Kleinman, revealing that financial advisors from Greenhill are orchestrating the sales process. WH Smith has honed in on its travel retail operations over the last ten years, with successful outlets in transport hubs like airports and train stations, as well as healthcare facilities, leading to its increased profitability—now, the high street segment contributes merely 15% of WH Smith's annual profits, as reported by .
Further details outlined by WH Smith highlight the scale and success of their travel business, stating, "Over the past decade, WH Smith has become a focused global travel retailer," and detailing that "The group’s travel business has over 1,200 stores across 32 countries, and three-quarters of the group’s revenue and 85 per cent of its trading profit comes from the travel business."
READ MORE: {}
Yet, the company emphasised there remains no absolute assurance of any deal being finalised, adding, "There can be no certainty that any agreement will be reached, and further updates will be provided as and when appropriate."
In its most recent financial briefing for the year concluding 31 August, 2024, WH Smith announced a revenue increase of seven percent, attaining £1.9bn driven largely by expansion into North America and ongoing growth within travel shops.
The company's pre-tax profit climbed by 16 per cent to £166m, up from £143m in 2023, with the entirety of last year's profit growth attributed to its travel locations. The total travel trading profit increased by 13 per cent to £189m, while profits from high street operations remained steady at £32m.
In November, the firm revealed it had 90 travel stores in the pipeline, two-thirds of which are located in the US, and anticipates opening 40 stores in this financial year.
"Over recent years, there has been a growing wedge between its traditional high street operations and its thriving travel retail division," Nicholas Found, head of commercial content at Retail Economics, commented.
"The move reflects broader structural issues facing legacy high street retailers, with many grappling to find relevance in a digital-first era, amid mounting cost pressures from announcements made in the Budget."