After over 230 years since it first opened its shop in central London, WH Smith is currently in confidential discussions to sell its entire high street business in Britain.
Sky News has exclusively revealed that the retail group, with a market capitalization of nearly £1.5bn, has been in talks with potential buyers for several weeks now.
WH Smith is set to disclose this plan to the London Stock Exchange on Monday morning.
The high street arm of the company consists of approximately 500 stores with around 5,000 employees countrywide.
It is currently under the same group as WH Smith’s rapidly expanding travel retail business, which operates in airports, train stations, and hospitals.
The travel retail business includes 600 shops in the UK, making up about half of the global total of around 1,200 travel retail outlets.
Greenhill bankers have been appointed to handle the sale of the high street business, with a deal expected in the upcoming months.
The potential buyers’ identities remain unclear as of Saturday.
The decision to divest its high street arm and focus on being a pure-play travel retail company is likely to be welcomed by investors, says one analyst.
WH Smith’s high street division, which registered flat operating profit of £32m last year, mainly sells greeting cards, books, and stationery, while the travel arm offers a broader range of food, drink, and technology products.
The travel business now makes up 75% of the company’s revenue and 85% of its profits, showcasing higher margins.
Particularly in the US market, the travel business is experiencing rapid growth.
The company’s retail operations in hospitals are also expanding rapidly, with stores in 145 hospitals across the UK and potential for more openings in 200 additional sites, according to its last financial results in November.
This potential sale marks a significant moment for the British high street industry.
WHSmith’s first store was established in 1792 by Henry Walton Smith and Anna Smith in Little Grosvenor Street, London.
The company also opened the first travel retail store in Euston station in 1848.
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There have been uncertainties about the future of WH Smith’s high street division for many years, especially with the struggles faced by other retailers like BHS, Debenhams, and Comet in the past 15 years.
This year, approximately 15 WH Smith stores are set to close as part of the annual review of its store portfolio.
In 2006, the company’s news distribution arm, now known as Smiths News, was separated into a distinct London-listed entity.
As of Friday, WH Smith’s shares closed at 1148p, showing a decline of about 5% over the past year.
Folloing Sky News’ report of its plans, WH Smith released a statement confirming its exploration of potential strategic options, including a possible sale, for this profitable component of the Group.
“Over the past decade, WH Smith has transitioned into a focused global travel retailer,” the statement mentioned, highlighting the significant contributions of the Travel business to the company.
“There can be no certainty about any agreements being reached, and further updates will be provided as needed,” the statement added.