WH Smith high street division attracts private equity interest amid strategic focus on travel

WH Smith is considering selling its 500-store high street business as it shifts focus to its thriving global travel operations.

Private equity firms Hilco and Alteri, both experienced in retail turnarounds, have expressed interest in acquiring the division. This move could affect approximately 5,000 employees and raises questions about the future of the high street estate.

The sale, initiated late last year, is estimated to generate between £100m and £130m based on the division’s earnings. Despite a 2% drop in like-for-like sales, cost-saving measures kept earnings steady at £32m. Analysts predict that earnings may decline to £27m this year.

WH Smith’s strategy reflects a decade-long pivot toward its travel business, which now operates over 1,200 stores across 32 countries. The travel division contributes 75% of the company’s revenue and 85% of its trading profit. “Over the past decade, WH Smith has become a focused global travel retailer,” the company said in a statement.

Analyst Jonathan Pritchard highlighted the challenges for potential buyers. “WH Smith already maximises its high street profitability, so it’s unlikely new owners will find easy ways to boost performance without store closures,” he said.

The sale process may also involve branding negotiations, as WH Smith intends to retain its name for its travel business. Shares in WH Smith rose after the announcement, reflecting investor optimism over a potential cash windfall from the deal.

The company has stressed that no agreement has been finalised, and further updates will be provided as discussions progress.

Source: The Standard

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