WH Smith sale to reshape UK high street with looming closures significant job losses

At least half of WH Smith’s high street stores may face closure under new ownership, creating the possibility of widespread job losses at the long-standing retailer. Industry experts suggest that a potential buyer would likely retain about 250 stores from the current 500, signalling a significant downsizing of its presence on British high streets. With approximately 5,000 employees affected, the future of WH Smith’s operations is hanging in the balance.

Potential buyers, including private equity groups such as Hilco, Alteri, and others like Modella Capital, are weighing offers which are expected to be finalised within the next few weeks, with a deal anticipated by early May. Analysts have estimated a purchase price of up to £100 million for WH Smith’s assets, which feature the Richard & Judy Book Club, 200 outlets incorporating post offices, and the rights to distribute Toys R Us products in the UK market. However, some analysts believe the final figure could fall below that threshold due to the business’s modest projected profits, excluding its online arm Funky Pigeon, which is not part of the sale.

Jonathan Pritchard of Peel Hunt highlighted uncertainties in the valuation, citing restrained profitability and central costs as key concerns. While WH Smith has contested the financial projections, potential buyers may still see an opportunity to streamline operations, particularly with leases averaging less than two years across its portfolio. Property experts suggest the brand could consolidate around its most viable outlets, with significant emphasis on the 200 stores that house post offices.

The company has already been reducing its high street footprint, closing 14 stores in 2024 with plans to shutter another 17 this year. Many in the retail sector believe new ownership would implement further restructuring or dispose of non-essential locations, possibly selling them off in parcels to other retailers, including Marks & Spencer or The Range. The diminishing relevance of some high street outlets, particularly in areas experiencing declining footfall, adds to the buyer dilemma.

Despite these challenges, WH Smith’s growing travel business is a noteworthy silver lining. Expanding into international and domestic travel hubs, such as airports, train stations and hospitals, this segment is expected to be a core focus of future operations. Retail insiders argue that retaining a widespread, convenient high street presence is essential to preserving the brand’s relevance, though achieving profitability remains an uphill battle.

While WH Smith has suggested it may not sell if bids fall short of expectations, experts believe significant downsizing is inevitable. Some suggest that unless a buyer transforms its high street operations, the retailer risks suffering the same fate as defunct competitors like Wilko and Woolworths, both casualties of modern retail trends. Any closures involving post office services may also draw backlash from the public due to these essential services’ convenience and accessibility. Time will determine whether WH Smith’s identity on the UK high street can be salvaged or continue to erode in the face of evolving consumer habits.