WH Smith, a longstanding presence on the UK high street, is set to make a significant change as the chain is sold to investors. The popular chain has agreed to sell its UK high street arm to Modella Capital, the owner of Hobbycraft, in a deal worth a substantial £76 million. Following this acquisition, the familiar WH Smith brand will undergo a transformation and eventually be rebranded as TGJones, the company has announced.
The decision to sell the high street chain comes on the heels of a challenging period for WH Smith, with a reported 6% drop in total high street sales during the 21 weeks leading up to January 25. This decline, especially evident during the crucial Christmas season, was further highlighted by a 3% decrease on a like-for-like basis. As a result of these struggles, WH Smith will now focus its operations on trading in train stations and airports, where it continues to see success.
Carl Cowling, the group chief executive of WH Smith, remains optimistic about the company’s future despite these challenges. He expressed confidence in the group’s strong position and highlighted the momentum seen in the core travel business. Cowling stated, “The group is in a strong position, and while there is some economic uncertainty, we are confident of another year of good growth in 2025.” However, the high street arm of the business faces significant hurdles, leading to a strategic shift towards a new direction.
In response to the changing landscape of retail, WH Smith has been actively adjusting its business model to adapt to the evolving market conditions. The company has been focused on cost-cutting measures and has closed unprofitable shops in an effort to streamline operations. The latest decision to divest the high street chain further underscores the challenges faced by traditional retailers in an era of digital transformation and shifting consumer preferences.
The recent Budget announcements have added to WH Smith’s financial pressures, with a projected increase of £20 million in the wage bill. In light of these developments, WH Smith revealed its plans to shut down 17 high street shops throughout 2025, building upon the closure of 14 shops in the previous financial year. The high street segment, which now contributes only around 15% of the annual group trading profit, has been overshadowed by the success of the travel division.
As WH Smith looks towards the future under new ownership and a rebranded identity, the company is positioning itself for continued growth and success. By focusing on its core strengths in the travel sector, WH Smith aims to capitalise on the opportunities presented in train stations and airports. The shift away from the high street reflects a strategic decision to realign the brand’s presence and offerings to better meet the demands of today’s consumers.
In conclusion, the sale of WH Smith’s high street chain marks a significant transformation for the iconic brand, signalling a shift in focus towards new avenues of growth and profitability. As the company navigates the changing retail landscape and embraces the challenges ahead, the rebranding as TGJones represents a fresh chapter in WH Smith’s storied history. Despite the hurdles faced by traditional retailers, WH Smith remains committed to innovation and adaptation in order to thrive in an ever-evolving marketplace.