WH Smith nears sale of high street chain as revenue rises
WH Smith has confirmed it remains on track to sell its high street division to the owner of Hobbycraft by the end of the month.
In March, the FTSE 250 company announced it had agreed to offload the arm to private equity firm Modella in a deal which valued it at £76m.
When complete, the WH Smith name will disappear from British high streets and be replaced by brand TGJones.
All of the approximately 480 stores and 5,000 staff working for the high street businesses will move under Modella Capital’s ownership as part of the deal.
In an update to the London Stock Exchange, WH Smith also confirmed that its total revenue rose five per cent in the 13 weeks to 31 May, while life-for-like sales also increased by five per cent.
Revenue in the UK grew five per cent, while revenue in North America increased three per cent and revenue in all other regions jumped by nine per cent.
WH Smith ‘firmly back on track’
WH Smith added that its expectations for the full year were unchanged, although it was “mindful of the broader economic and geopolitical uncertainty”.
“[WH Smith] is well positioned as we enter our peak summer trading period,” it said.
“We are strengthening our focus on cost and cash discipline, and we are in a strong position to capitalise on substantial value creating opportunities that exist across our markets.”
Juliie Palmer, partner at Begbies Traynor, said that WH Smith looks “firmly back on track” after offloading its struggling high street division.
“Now repositioned as a pureplay travel retailer, the business is off to a flying start, with revenues up across all geographies as it taps into the ongoing travel boom.”
However, Palmer warned that Us tariffs may “unsettle” its North America operations, while “ongoing geopolitical tensions pose a risk to global travel industry”.
“With the crucial summer season fast approaching, the market will be watching closely to see if WH Smith can continue to build on its momentum and cement its position as a leader in the travel retail space.”