High Street Retailer WhSmith Enters Uncertain Future as It Seeks New Ownership

WH Smith’s High Street Stores Up for Sale Amid Uncertainty for Workers

The 232-year-old chain is in talks with a handful of potential bidders, having kicked off the prospective sale process at the end of last year.

The Future of High Street Retail

In a surprise move, WH Smith has confirmed that it is exploring potential strategic options for its profitable and cash-generative high street stores. This includes a possible sale, which would free up the parent company to focus on its more successful travel arm. The use of the brand itself will be up for negotiation with any prospective buyer.

A Shift in Focus

The financial success of WH Smith’s approaching 1,300 travel stores has made them the focus of a potentially slimmed-down business. In the year to 31 August 2024, travel stores generated three-quarters of the group’s revenue of about £1.9 billion. Restructuring firm Alteri is understood to be among a small group of parties considering a potential bid for the high street stores.

Concerns Over Job Cuts and Shop Closures

However, the prospect of the high street brand being picked up by a turnaround firm has raised questions over potential job cuts or shop closures. WH Smith’s high street staff – which account for about 5,000 of its 13,870 workforce – are not unionised, meaning there could be fewer hurdles to slashing the workforce.

A Different Future for High Street Stores

Commenting on the prospective sale, Kien Tan, a senior retail adviser at PwC said: “The same formula that works in travel stores is no longer sufficient on high streets, where many of its products are available at other retailers or online.” While it’s unclear what the future holds for WH Smith‘s high street stores, it’s clear that they will likely look very different. Different products, perhaps incorporating hospitality or other services to give people a reason to visit.

A History of Restructuring

It’s not the first time that WH Smith has tried to find a buyer. In 2004, the company put the entirety of its business up for sale but eventually scuppered the deal after failing to come to an agreement about how to fill the £250m black hole in its pension fund.

A Different Approach This Time Around

However, that potential roadblock was cleared in 2022 when the company sold off its defined contribution pension liabilities to Standard Life. There is also speculation that WH Smith’s flopped rebrand of high street stores in 2023 was part of an early attempt to distance it from the travel brand.

The Decision Looms

As the sale process moves forward, one thing is clear: the future of WH Smith’s high street stores hangs in the balance. With a handful of potential bidders in the mix, only time will tell what the outcome will be for the company and its 5,000 staff members.