WH Smith in talks to sell high street stores

British retailer WH Smith has stated that it is in talks to sell its high street stores. The company said in a statement on Saturday that it was “exploring potential strategic options for this profitable and cash-generative part of the group, including a possible sale.”

The statement also noted that over the past decade, the business has developed into “a global travel retailer focus” with its travel division having more than 1,200 stores in 32 countries. This announcement comes amid a difficult economic outlook for high street retailers and years of negative consumer sentiment towards the chain.

WH Smith's first high street store opened more than 230 years ago as a news vendor. Since then, it has grown into a major high street and travel retailer. Currently, WH Smith's travel retail business, which operates in airports, train stations, and hospitals, contributes more than 85% of its profits, with the remainder coming from its high street business.

The retailer said that there is “no certainty that any agreement will be reached” but added that it would provide updates on any potential sale. Its high street stores employ around 5,000 staff, with approximately 200 of these stores also housing Post Office counters, which are staffed by WH Smith employees.

Regarding the future of these counters, the Post Office said it was in contact with WH Smith “to understand more about their plans for their high street stores.” WH Smith had a valuation of £1.5 billion at the close of trading on Friday, a figure that represents the value of the entire group.

Catherine Shuttleworth, consumer retail analyst at Savvy Marketing, said that shopping habits in the UK had “fundamentally changed,” reducing the reasons people have to visit stores like WH Smith. “Most of us read the news online rather than magazines and newspapers, we download ebooks and send birthday cards via online operators,” she said. Shuttleworth added that businesses like WH Smith are now focusing on “stores in high-footfall areas such as airports, stations and hospitals.”

Over the years, the UK high street has seen a change in its makeup, with flagship retailers like Wilko collapsing due to the cost of maintaining their businesses not matching the revenue the stores brought in. Retail consultant Richard Hyman said that Saturday's news was “not a surprise” as WH Smith’s high street stores had been “underperforming for many years” and that it was becoming increasingly difficult to be a generalist retailer. Hyman emphasized that WH Smith was not an isolated case, pointing to the collapse of other large retailers such as Debenhams and Woolworths.

Commenting on WH Smith’s future, Hyman said that “I haven’t met anybody on a retail leadership team who thinks the outcome isn’t bleak.” WH Smith’s high street stores saw revenue decrease by £17 million in 2024 compared to the previous year, but profits remained flat due to the business closing 14 stores last year. In addition, consumer perception of high street stores has been poor.

A 2019 Which? survey found that WH Smith was the lowest-ranked high street retailer, the ninth year in a row it had appeared in the bottom two spots, with shoppers describing the stationery specialist as “cramped and cluttered.” Nicholas Found, from research consultancy Retail Economics, said that a potential buyer may see an opportunity to “restructure and reimagine the WH Smith high street business,” albeit in a “challenging environment.”

Following the release of WH Smith's most recent financial results, group chief executive Carl Cowling said: “Our UK high street business continues to execute its strategy of managing space to maximise returns and maintaining a flexible cost structure.” He cited the opening of dozens of Toys 'R' Us "shop-in-shops" in the second half of 2024 as an example. Toys 'R' Us collapsed in 2018 and agreed a deal with WH Smith to set up concession stands.

Cowling told the BBC in 2023 that the retailer would not be opening any more high street stores in the UK. Instead, it would be focusing on airports and train stations in the UK, as well as opening stores in the US and Europe. Found said that it was clear that WH Smith had “strategically moved towards” the “fast-growing” travel retail business. He added that the abandonment of its high street business would allow it to focus fully on this new direction.