WH Smith completes sale of high street business – after cutting the price
- It will now focus on its business in train stations and airports
WH Smith has completed the sale of its high street business for less than initially agreed after a demand slowdown forced the renegotiation of terms.
The group agreed a £76million sale of the high street business to Hobbycraft owner Modella in May as it transitions to a ‘pure play’ travel retailer, focusing efforts on its stores in train stations and airports.
It will see the WH Smith name disappear from British high streets, replaced by the TGJones brand.
But WH Smith told investors on Monday the sale had completed for a reduced fee.
It said ‘the future of the high street business under a change of ownership has led to a more cautious outlook amongst stakeholders’, while demand has softened.
This has ‘resulted in a reduction in the ongoing cash flow of the business’, the group said, leading to Modella seeking amendments to the transaction.
New strategy: WH Smith is transitioning to a ‘pure play’ travel retailer, focused on its stores in train stations and airports
WH Smith will now receive an up-front consideration of £10million at completion, and up to £20million of deferred consideration whereby the retailer and Modella equally share in the cash flow generation of the business to August 2026.
It will also receive up to £10m of additional proceeds based on ‘timing and realisation of certain tax assets within the high street business’, WH Smith said.
The group added: ‘WHSmith expects gross cash proceeds of up to £40million.
‘This compares to the previous announcement of £52million of gross cash proceeds. Transaction and separation costs remain unchanged at £27million.
WH Smith shares sank 5.5 per cent to 1,067p in early trading.
The retailer also told shareholders it now expects headline net debt as at 31 August 2025 to be around £425million.
It added: ‘As the group enters the peak summer trading period, the travel divisions continue to trade in line with market expectations.’
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