WH Smith PLC (LSE:SMWH) is stepping away from the UK High Street after agreeing to sell that part of the business to Modella Capital for £76 million. The move clears the path for the group to focus entirely on its fast-growing Travel division.
The deal is set to generate £52 million in gross cash, with around £25 million expected to land in WHSmith’s coffers once all costs are accounted for.
Importantly, the WHSmith name stays with the company’s Travel operations, which span 32 countries and include stores in airports, hospitals and rail stations across the UK. The High Street stores - roughly 480 in total, with around 5,000 staff - will shift to Modella ownership and eventually rebrand as TGJones.
Chief executive Carl Cowling said the sale marks a “pivotal moment” for the business. “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 said.
Travel already makes up the bulk of WHSmith’s performance, contributing 75% of revenue and 85% of trading profit in the most recent financial year. The company expects the deal to sharpen its financial performance, with better revenue growth and stronger margins.
Completion is expected before the end of the current fiscal year. The funkypigeon.com brand is not part of the sale and remains under strategic review.
WHSmith runs over 1,200 Travel stores globally and is targeting growth by increasing passenger spend, opening new stores, and making better use of space. The group sees strong long-term potential as international travel volumes rise and airport infrastructure expands.