The retailer, which has a shop in Coney Street and at Monks Cross as well as one in Malton is in talks to offload its 500 high street stores, as reported by The Sunday Times.
The culmination of a sale would almost certainly result in the disappearance of a high street brand that has been an ever-present since 1792, when WH Smith opened its first shop in central London. It will raise concerns that the retail group is seeking to distance itself from any fallout from the sale and prompt questions about the long-term future of many stores.
Malton branch of Halifax to close next spring
The auction, which is being run by bankers from Greenhill, has drawn interest from investment firms Alteri and Modella Capital, which both specialise in buying and restructuring distressed retailers. First-round bids were submitted last week.
WH Smith’s high street arm has been stuck in long-term decline as the expansion of supermarkets and discounters, as well as the rise in online shopping, have combined to lure customers away from the high street.
The retailer’s 500 high street stores have an average lease length of just two years, raising the prospect that many underperforming outlets could be quickly closed under a new owner. Almost 200 WH Smith stores also contain a post office.
WH Smith’s high street business generated a so-called trading profit of £32 million on sales of £452 million in the year to August. Like-for-like sales fell 3 per cent in the high street business during the 21 weeks to January 25.
The group’s travel retail business — whose stores trade under the WH Smith banner, as well as InMotion and MRG — generates 85 per cent of the group’s profit.
Potential buyers — which also include Doug Putman, the Canadian tycoon who rescued HMV — will be set a timeframe under which they would need to relinquish the brand name. A source close to WH Smith said bidders were attracted to the retailer because of its strength across multiple product categories and its clear “hub of the high street” strategy. While a deal under which a new owner licenses the WH Smith brand name is understood to be unlikely, it is not entirely out of the question.
WH Smith, which started as a news vendor, and once owned bookseller Waterstones and music retailer Our Price, enjoyed its halcyon days in the Seventies and Eighties. However, as shoppers deserted the high street, WH Smith reacted by cutting costs and scaling back investment in its high street estate.
The Malton store, in Wheelgate, was previously a Woolworth store. It is also next door to the Halifax bank which will shut next month.