WH Smith in talks to promote excessive road shops

WH Smith is in talks to promote its excessive road shops, the British retailer has stated.

The agency stated that it was “exploring potential strategic choices for this worthwhile and cash-generative a part of the group, together with a attainable sale”, in a press release on Saturday.

It went on to say that over the previous decade, the enterprise had develop into “a targeted international journey retailer”, with its journey arm having greater than 1,200 shops throughout 32 nations.

The announcement comes amid a troublesome financial outlook for prime road retailers and following years of unfavourable client sentiment in the direction of the chain.

The primary of WH Smith’s 500 excessive road shops opened greater than 230 years in the past, working as a information vendor. It has since grown into a serious excessive road and journey retailer.

The journey retail enterprise aspect of WH Smith – which operates from airports, practice stations and hospitals – now accounts for greater than 85% of its revenue. The excessive road enterprise makes up the remainder.

The retailer stated there was “no certainty that any settlement will likely be reached”, however added that it might present updates on the attainable sale.

It employs round 5,000 folks at its excessive road outlets.

Round 200 of its shops even have a Submit Workplace counter that are staffed by WH Smith workers.

Commenting on the way forward for these counters, the Submit Workplace stated it’s involved with WH Smith “to grasp extra about their plans for his or her excessive road shops”.

Final November, the state-owned Submit Workplace introduced it was reviewing the way forward for 115 branches it owns. One choice it was exploring was a franchise association with WH Smith.

WH Smith was valued at £1.5bn on the shut of enterprise on Friday. That determine represents the worth of all the group.

Catherine Shuttleworth, a client retail analyst at Savvy Advertising and marketing, stated buying behaviour within the UK had “radically modified”, decreasing the explanations to go to shops like WH Smith.

“Most of us learn our information on-line not in magazines and newspapers, we obtain books and ship birthday playing cards by on-line operators,” she stated.

The main focus for a enterprise like WH Smith was now “in outlets in excessive footfall areas like airports, stations and hospitals,” Ms Shuttleworth added.

For years the UK’s excessive road has witnessed a change in its make-up, with flagship retailers equivalent to Wilko going bust as a result of a mismatch between the price of enterprise maintenance and the quantity of income shops usher in.

Retail guide Richard Hyman stated Saturday’s information “comes as no shock” as WH Smith’s excessive road shops had been “underperforming for a few years” whereas being a generalist retailer has develop into more and more troublesome.

The retail specialist highlighted that WH Smith is just not alone, pointing on the demise of different large retail names, equivalent to Debenhams and Woolworths.

Commenting on WH Smith’s future, Mr Hyman stated he’s “but to come back throughout anybody on a retail management staff who thinks the result is something apart from bleak”.

Income from WH Smith’s excessive road shops dropped by £17m in 2024 in contrast with the yr earlier than, however earnings stayed the identical after the enterprise closed 14 of its shops final yr.

Its excessive road shops have additionally been seen unfavourably by customers.

In 2019, a Which? survey discovered WH Smith ranked the bottom amongst excessive road retailers – the ninth yr in a row it appeared within the backside two spots – with buyers describing the stationery specialist as “cramped and messy”.

Nicholas Discovered, of the Retail Economics analysis consultancy, stated potential patrons may even see alternatives to “restructure and reimagine WH Smith’s excessive road presence”, albeit in a “difficult local weather”.

Talking after WH Smith’s most up-to-date monetary outcomes, group chief govt Carl Cowling stated: “Our UK excessive road enterprise continued to ship its technique of managing house to maximise returns and sustaining a versatile value construction.”

He cited the opening of dozens of Toys R Us “shop-in-shops” within the latter half of 2024 for example of this. Toys R Us went bust in 2018 and a deal was struck with WH Smith to host concession stands.

Mr Cowling instructed the BBC in 2023 that the retailer wouldn’t be opening any extra excessive road shops within the UK. As an alternative, it might concentrate on UK airports and practice stations, in addition to opening outlets within the US and Europe.

Mr Discovered stated it was clear that WH Smith had “strategically pivoted” in the direction of the “fast-growing” journey retail enterprise. Dropping its excessive road enterprise, he added, would permit it to focus completely on this new course.