Latest news with #highstreetbusiness
The Independent
30-06-2025
- Business
- The Independent
WH Smith cuts sale price of high street business after weaker trading
WH Smith has been forced to slash the price of its high street business in a last-minute renegotiation after recent trading worsened. The retailer revealed that, while the sale of the high street chain to Hobbycraft owner Modella Capital completed on Monday, the cash returns from the sale would now be lower than first expected. It said it now expects to receive gross proceeds of up to £40 million, down from the £52 million it first forecast. WH Smith said investment firm Modella had sought to renegotiate the price due to 'softer' recent trading. 'Following the agreement and announcement of the sale, the future of the high street business under a change of ownership has led to a more cautious outlook amongst stakeholders,' it said. WH Smith added that it agreed to renegotiate on the price 'given the original agreement was no longer deliverable'. Shares in WH Smith – which is now purely focused on its shops based at travel sites in the UK and worldwide – fell as much as 8% at one stage, before settling around 3% lower in midday trading on Monday. The sale to Modella agreed in March – initially valuing the high street chain at £76 million – will result in the WH Smith name disappearing from British high streets and being replaced by brand TGJones. All of the approximately 480 stores and 5,000 staff working for the high street businesses will move under Modella's ownership as part of the deal. The sale comes after years of under-pressure trading at the division, while WH Smith's travel business has grown to make up the bulk of the group's sales and profits, with more than 1,200 stores across 32 countries. WH Smith's half-year results in April showed the profits at the high street chain had slumped by a quarter to just £20 million. Buyer Modella specialises in investing in retailers. It has previously put money into chains including Paperchase and Tie Rack, while in August last year it snapped up arts and crafts retailer Hobbycraft for an undisclosed sum.
Daily Mail
30-06-2025
- Business
- Daily Mail
WH Smith completes sale of high street business - after cutting the price
WH Smith has completed the sale of its high street business for less than initially agreed after a demand slowdown forced the renegotiation of terms. The group agreed a £76million sale of the high street business to Hobbycraft owner Modella in May as it transitions to a 'pure play' travel retailer, focusing efforts on its stores in train stations and airports. It will see the WH Smith name disappear from British high streets, replaced by the TGJones brand. But WH Smith told investors on Monday the sale had completed for a reduced fee. It said 'the future of the high street business under a change of ownership has led to a more cautious outlook amongst stakeholders', while demand has softened. This has 'resulted in a reduction in the ongoing cash flow of the business', the group said, leading to Modella seeking amendments to the transaction. WH Smith will now receive an up-front consideration of £10million at completion, and up to £20million of deferred consideration whereby the retailer and Modella equally share in the cash flow generation of the business to August 2026. It will also receive up to £10m of additional proceeds based on 'timing and realisation of certain tax assets within the high street business', WH Smith said. The group added: 'WHSmith expects gross cash proceeds of up to £40million. 'This compares to the previous announcement of £52million of gross cash proceeds. Transaction and separation costs remain unchanged at £27million. WH Smith shares sank 5.5 per cent to 1,067p in early trading. The retailer also told shareholders it now expects headline net debt as at 31 August 2025 to be around £425million. It added: 'As the group enters the peak summer trading period, the travel divisions continue to trade in line with market expectations.'
