Become a Member
  • Track your favourite stocks
  • Create & monitor portfolios
  • Daily portfolio value
Sign Up
Quickpicks
Add shares to your
quickpicks to
display them here!

WH Smith exits UK high street to go all-in on travel retail

28th Mar 2025 09:00

(Alliance News) - WH Smith PLC on Friday said it has agreed to sell its UK High Street business to private equity firm Modella Capital Ltd for a cash-and-debt-free enterprise value of GBP76 million, as it sharpens its focus on its faster-growing global travel operations.

The Swindon, England-based retailer said the deal includes around 480 stores and 5,000 staff, who will transfer to UK-based Modella's ownership once the transaction is completed later this year.

The shops will continue operating under the WHSmith name for a transitional period before rebranding as TGJones, and will be led by Sean Toal, the current chief executive officer of the division.

The WHSmith brand itself is not part of the transaction and will remain in use across the group's international and domestic travel retail sites, including those at airports, train stations and hospitals.

The travel business, which now accounts for 75% of WH Smith's revenue and 85% of trading profit, will remain the core of the group as "we move forward as a pure play travel retailer".

Gross cash proceeds from the sale are expected to be GBP52 million, with net proceeds of around GBP25 million after transaction and separation costs. WH Smith said the funds will be deployed in line with its capital allocation policy, which prioritises reinvestment in high-return travel opportunities such as new store openings and estate upgrades.

The policy also supports a progressive dividend aligned with earnings growth, value-enhancing acquisitions in the travel sector, and ongoing share buybacks. The group aims to maintain a strong balance sheet and return to its target leverage range of 0.75 to 1.25 times earnings before interest, taxes, depreciation, and amortisation by the end of August 2026.

The sale marks a significant strategic shift for the group, which has increasingly pivoted towards travel retail in recent years, expanding to over 1,200 stores across 32 countries. The company said its future strategy is focused on increasing spend per passenger, expanding its global footprint, and making optimal use of retail space at transport hubs.

"As we continue to deliver on our strategic ambition to become the leading global travel retailer, this is a pivotal moment for WHSmith as we become a business exclusively focused on travel," said Chief Executive Carl Cowling.

"High Street is a good business… but given our rapid international growth, now is the right time for a new owner to take the high street business forward and for the WHSmith leadership team to focus exclusively on our travel business," he added.

The deal excludes WH Smith's online greetings card arm, funkypigeon.com, for which the group said it is exploring strategic options, including a possible sale.

Modella Capital specialises in retail turnarounds and previously invested in Paperchase Products Ltd and Tie Rack Ltd. It acquired arts and crafts chain Hobbycraft Group Ltd last August.

WH Smith said the sale will enhance its financial profile, improve margins, and accelerate growth in trading profit and earnings per share. The group reaffirmed that trading remains in line with market expectations.

The company will report its interim results on April 16.

Shares in WH Smith were up 1.2% at 1,103.00 on Friday morning in London, giving the company a total market capitalisation of GBP1.41 billion. The stock is down 16% over the past year.

By Eva Castanedo, Alliance News reporter

Comments and questions to [email protected]

Copyright 2025 Alliance News Ltd. All Rights Reserved.


Related Shares:

Wh Smith
FTSE 100 Latest
Value8,658.85
Change-7.27