Iconic Brand to Exit After Five Centuries
WHSmith, a staple of British high streets for 232 years, is set to vanish entirely as all 500 of its shops are sold in a £76 million agreement. The venerable retailer has partnered with Modella Capital, who will transition the stores under the new TGJones brand.
Massive Workforce Affected by Sale
The closure of WHSmith's high street locations marks a significant shift, impacting around 5,000 employees who have been part of the brand's longstanding presence in town centres and shopping outlets.
Strategic Shift Towards Travel Market
Carl Cowling, the chief of the high street division, described the sale as a "pivotal moment" for the company. WHSmith has been gradually reducing its focus on urban shops, redirecting its efforts towards the more profitable travel sector. “Our Travel business currently accounts for around 75% of the Group's revenue and 85% of its trading profit,” Cowling explained.
Continuation of Travel Stores
Despite the high street exit, WHSmith's extensive network of over 580 travel stores located in airports, hospitals, railway stations, and motorway service areas will remain operational. Earlier this year, the company announced plans to open 15 new travel-oriented shops by the end of 2024, part of a broader strategy to expand internationally with 110 new branches worldwide.
Modella Capital's Expanding Portfolio
The new owners, Modella Capital, have a track record of acquiring well-known British retailers. Last August, they purchased Hobby Craft, followed by The Original Factory Shop just last month. This acquisition of WHSmith adds to their growing collection of iconic stores.
High Street Challenges Intensify
The departure of WHSmith from high streets arrives amid ongoing struggles faced by brick-and-mortar retailers. Similar to the recent downfall of rival Wilko, which was partially saved by The Range, WHSmith's exit underscores the difficulties physical stores encounter due to reduced consumer spending and the surge in online shopping.
Future Uncertain for Poundland
In related developments, Pepco Group, which owns Poundland stores in the UK, has enlisted advisory firm Teneo to manage the sale of the business. Pepco is exploring various strategic options to separate Poundland from its other brands, potentially focusing on its more profitable European ventures. This move has raised concerns about the future of Poundland's 800 UK stores.
WHSmith’s Financial Performance
WHSmith's latest financial results for the 21-week period ending January 25, 2025, indicated strong performance in its travel segment, with North American stores experiencing a 3% revenue increase on a like-for-like basis. This robust performance in travel operations has been a key factor in the company's strategic realignment.
A Changing Retail Landscape
The sale of WHSmith's high street shops to Modella Capital is a reflection of the broader transformations within the retail sector. As consumer behaviours evolve and digital commerce continues to expand, traditional retailers are reassessing their physical presence to adapt to new market realities.
Looking Ahead
While WHSmith’s high street legacy comes to an end, its continued investment in travel stores suggests a shift towards more resilient and profitable markets. The rebranding to TGJones under Modella Capital signals a new chapter for the former high street giant, even as the retail landscape continues to change rapidly.
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