WH Smith’s name is about to disappear from British high streets, after it announced the sale of its stores to private equity firm Modella Capital for £76m.
Modella specialises in buying troubled retailers, having recently bought The Original Factory Shop and joined a bid for Lakeland.
The deal does not include the WH Smith brand, meaning all stores will rebrand as TGJones after a short transition.
WH Smith said all stores, colleagues, assets and liabilities would move under Modella Capital’s ownership with the new business led by Sean Toal, currently CEO of the high street business.
The sale also does not include the online greeting card business funkypigeon.com, which WH Smith is still looking to sell.
WH Smith is choosing to dispose of its 500 high street stores to focus on its more profitable travel retail operations, which make up about 75% of the group’s revenue.
The deal will deliver the retailer about £25m in net cash once the transaction and separation costs are accounted for.
Carl Cowling, CEO, said it was a “pivotal moment” for WH Smith.
“As our travel business has grown, our UK high street business has become a much smaller part of the WH Smith 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.”
The retailer began talks to offload the business in January after almost two centuries on the high street.
The auction was run by bankers from Greenhill and came down to a battle between Modella and Alteri, another specialist in buying distressed retailers. First-round bids were submitted at the end of February.
WH Smith’s high street stores have become a drag on the performance of the rest of the group, with sales falling 6% in the second half of the year, compared with 3% growth across the whole business.
The falling sales in its high street stores was exacerbated by store closures, with a like-for-like comparison showing sales down just 3%.
WH Smith has closed numerous high street stores since 2023, when it announced it would focus more airports and railway stations.
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