WH Smith is in talks to quit the high street after 230 years amid an economic downturn and looming tax rises.
The retailer said on Saturday that it was looking at selling its high street arm, saying it was “exploring potential strategic options for this profitable and cash generative part of the group, including a possible sale.”
Founded in 1792, WH Smith is a stalwart of the nation’s high streets and has more than 1,700 sites across the globe, selling stationery, books and greeting cards.
But in recent years the business has pivoted to focus on travel, with stores in train stations, airports and hospitals, in response to declining footfall in town centres and the rise in online competition.
It now has around 500 high street UK sites, employing 5,000 staff members, while its domestic travel arm has around 600 sites. It also has hundreds of stores in Europe and the US.
The high-street arm of the business now accounts for just 15pc of the retail giant’s annual profit, with pre-tax profits for the year to Aug 31 standing at £166m. This is up from £143m the previous year.
The retailer’s earnings from the high street remained flat, at just £32m – despite cost-saving measures including the closure of 14 stores last year – whereas growth in the travel sector, especially in the US, has proved strong.
Earlier this week, it emerged that an estimated 15 stores would also face closure this year, as part of an annual review of locations.
It comes as businesses face increased costs in the wake of Rachel Reeves’s employer’s National Insurance hike, as well as an increase in the minimum wage from April.
The Centre for Retail Research has warned that it expects 17,350 shops to close in 2025 – compared to 13,479 last year. Retail and hospitality are expected to be hit particularly hard, as a result of squeezes on margins and high staff costs.
High-street stores will also see a jump in property taxes as business rate relief is cut. The rates bill for the average shop will surge from £3,589 to £8,613 for 2025-26, according to analysis by the real estate firm Altus Group.
A spokesman for WH Smith said: “Over the past decade, WH Smith has become a focused global travel retailer. The group’s travel business has over 1,200 stores across 32 countries, and three-quarters of the group’s revenue and 85pc of its trading profit comes from the travel business.
“There can be no certainty that any agreement will be reached, and further updates will be provided as and when appropriate.”
Bankers from Greenhill have been drafted in to sell the arm of the company, which has been listed on the stock exchange since 1949.
