WHSmith sells UK high street arm for £76m to Modella Capital

WHSmith has agreed to sell its UK high street business to Hobbycraft owner Modella Capital for £76m as it pivots to focus solely on its fast-growing travel retail division.

The deal, which is set to complete later this year, will see the retailer‘s 480 high street stores, employing around 5,000 staff, transition to new ownership under Modella, with current high street boss Sean Toal set to lead the newly formed retailer.

The stores will operate under the WHSmith brand for a short transitional period before rebranding as TGJones.

The sale does not include WHSmith’s name, meaning the brand will remain exclusively associated with its travel retail arm, which continues to expand across airports, train stations, and hospitals in 32 countries.

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The high street arm has become an increasingly smaller part of the WHSmith Group, with 75% of its revenue and 85% of its trading profit in the last financial year coming from its travel operations.

The sale marks the end of an era for WHSmith, which has been a staple of the British high street for over two centuries since opening its first store in London in 1792.

Group CEO Carl Cowling said: “As we continue to deliver on our strategic ambition to become the leading global travel retailer, this is a pivotal moment for WHSmith as we become a business exclusively focused on Travel.

“With the ongoing strength in our UK Travel division, and the scale of the growth opportunities in both North America and the Rest of the World, we are in our strongest ever position to deliver enhanced growth as we move forward as a pure play travel retailer.

“As our Travel business has grown, our UK High Street business has become a much smaller part of the WHSmith Group. High Street is a good business; it is profitable and cash generative with an experienced and high-performing management team.

“However, given our rapid international growth, now is the right time for a new owner to take the High Street business forward and for the WHSmith leadership team to focus exclusively on our Travel business. I wish the High Street team every success.

“As we look forward as a simplified, travel-focused Group, I am excited about the Group’s future prospects. With a clear strategy, a strong balance sheet, and operations in high growth and attractive markets, we are well-positioned to generate substantial growth and value for all stakeholders.”

The news comes after the retailer completed its refinancing ahead of high street store sale plans earlier this week.

It secured £320m from US investors and via a new bank loan, as part of its strategy to expand its global travel retail arm and explore options for its UK high street shops.

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