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Sales at WHSmith’s UK high street stores fell during the key festive period, as the retailer seeks to sell off the units.
The FTSE 250 company known for its stationery and books, last week confirmed it was reviewing strategic options for about 500 high street shops, including an outright sale, more than two centuries after the retailer was established as a family-run newsagent.
On Wednesday, WHSmith reported a 3 per cent drop in like-for-like sales in its high street division for the 21 weeks to January 25 compared with the same period a year earlier.
The decline was in line with expectations and was more than offset by a 6 per cent increase in revenues in its travel division, which was boosted by higher footfall in its stores in airports and train stations.
Overall, the group reported a 3 per cent increase in sales across its entire business compared with the same period the previous year.
Chief executive Carl Cowling said the group was in “a strong position” despite economic uncertainty, and maintained its forecast for “another year of good growth” in 2025.
WHSmith did not comment further on the sale process. A deal is expected in the coming months with Alteri, a private equity investor which focuses on retail, and Hilco, a turnaround specialist, among the interested parties.
Peel Hunt analysts have estimated that the high street division could fetch between £100mn and £130mn. The company has cautioned that there is no certainty a deal will be reached.
The group said it was on track to deliver full-year cost savings of £11mn in its high street division, but Richard Chamberlain, a retail analyst at RBC Capital Markets, said that the “scope for further cost-cutting is probably less now” because of the amount of costs already removed.
WHSmith has been slashing costs in the high street stores to improve profitability as it grapples with the shift to online shopping, which has affected the number of customers visiting stores.
The high street arm’s underlying annual profits after the Covid-19 pandemic fell from about £60mn to £32mn in the year to August 2024.
Jonathan Pritchard, an analyst at Peel Hunt, has said that a new owner could consider further store closures in an efficiency drive.
“It is hardly as though this is a fat business, with lots of inefficient processes and store staff dossing about. Quite the opposite,” he said.
“Store closures could be material in somebody else’s hands, but WHSmith itself, clearly, has a good line of sight on how to get the most out of the chain, and it is unlikely that anyone else has the silver bullet to regalvanise profitability here.”
