WH Smith is set to shut down 20 of its branches amidst rumors of the potential sale of its entire High Street chain. The decision comes after the closure of 14 branches last year, with talks now circulating about the possible sale of its High Street stores as the company shifts focus towards its travel operations in train stations and airports. The closure announcement follows a reported 6% drop in high street sales for the 21 weeks leading up to January 25, with a 3% decrease on a like-for-like basis during the crucial Christmas period.
According to Wales Online, WH Smith’s travel shops located in airports, railway stations, and hospitals have shown promising performance, with a 6% increase in like-for-like sales over the past five months. This positive trend has contributed to an overall revenue rise of 3% on a same-store basis. The Group’s Chief Executive, Carl Cowling, expressed confidence in the company’s position, despite economic uncertainties, predicting another year of growth in 2025. However, the challenges facing the High Street arm have been highlighted, prompting cost-cutting measures and the closure of unprofitable stores.
The High Street division, which has been grappling with decreasing trade in recent years, is undergoing significant restructuring as WH Smith aims to streamline its operations. The company plans to shut down 17 high street stores in 2025, having already closed 14 in the previous financial year. With the high street business currently contributing only 15% of the annual group trading profit, the company is shifting its focus towards expanding the travel division, especially in North America and worldwide.
Private equity investors are reportedly eyeing the high street division, raising concerns for the approximately 5,000 employees across the affected branches facing uncertain futures. The closures are distributed across various locations, with stores in areas such as Bournemouth, Luton, and Newport among those set to shut down in the coming months. Despite these challenges, WH Smith remains optimistic about the growth prospects in its core travel business, demonstrating a strong performance in the face of ongoing economic fluctuations.
As the company navigates through these changes, the announcement of branch closures underscores the broader shifts in the retail landscape, reflecting the evolving consumer preferences and market dynamics. WH Smith’s strategic realignment towards travel operations signals a concerted effort to adapt to changing retail trends and capitalize on growth opportunities in key locations. The transition comes at a pivotal moment for the company, as it seeks to enhance its competitive position and drive sustainable business performance in a shifting retail environment.
In conclusion, WH Smith’s decision to close 20 branches and potentially sell its High Street chain reflects a strategic pivot towards strengthening its travel operations. The move underscores the company’s commitment to reshaping its business model in response to evolving market conditions and consumer behaviours. As the retail sector continues to undergo transformation, WH Smith’s proactive stance towards optimizing its operations demonstrates a strategic vision aimed at ensuring long-term resilience and growth.