Back on January 29th, we published a blog asking, What Will Happen to the Iconic Brand After WHSmith's Possible High Street Sale? (which you can read here). Now, just two months later, WHSmith has confirmed the sale of its UK high street business to Modella Capital for £76 million. This strategic move allows the company, a respected name on British high streets for over two centuries, to focus on its rapidly growing travel retail operations—an increasingly vital driver of its growth and profitability.
A Strategic Shift Towards Travel Retail
The decision to divest from the high street underscores WHSmith's commitment to expanding its presence in travel hubs such as airports, train stations, and hospitals. With over 1,200 travel stores across 32 countries, this segment has been a significant contributor to the company's revenue and profits. CEO Carl Cowling emphasized that this move enables WHSmith to focus exclusively on its rapidly growing international travel business.
Why Travel Retail?
Several factors make travel retail particularly appealing:
Captive Audience: Travelers often have limited options and ample waiting times, increasing the likelihood of in-store purchases.
Reduced Online Competition: Unlike the high street, travel locations face less competition from e-commerce giants, as immediate, on-the-go purchases are less susceptible to online alternatives.
Premium Locations: Airports and train stations offer high footfall and a diverse customer base, providing a lucrative environment for retail operations.
Implications for the Retail Industry
WHSmith's exit from the high street reflects broader trends in the retail sector, including declining footfall, rising operational costs, and the increasing dominance of online shopping. This move may prompt other retailers to reevaluate their strategies and consider focusing on niche markets or alternative retail environments.
Vertex View
As WHSmith embarks on this new chapter, the company is well-positioned to capitalise on the growing travel retail market. By homing in on this sector, WHSmith aims to enhance its profitability and ensure its brand remains a familiar presence for travellers worldwide.
