WH Smith has reported falling sales in its UK high street stores, while revenues rose at its more successful travel arm, as the retail group attempts to off-load its ailing town centres division.
The retailer’s up-for-sale high street division – where it sells newspapers, books, stationery, cards and gifts – reported a 6% fall in sales in the 21 weeks to 25 January, compared with a year earlier.
This contrasted with a 7% increase in sales at its travel arm, where it has stores in railway stations, airports and hospitals across 32 countries.
The owner’s decision to put its 500 UK high street stores up for sale has created uncertainty for 5,000 staff, and could lead to the 233-year-old chain’s name disappearing from British town centres but potentially live on at transport hubs.
Analysts said the sale would allow the company to focus on its growing travel division, which has almost 1,300 shops, and which accounted for three-quarters of the group’s revenue in the year to the end of August.
The retailer said it was benefiting from increased numbers of passengers at airports, while it was growing its profits in these stores by selling a wider range of products, including health and beauty items and food.
It also reported rising revenue at its North American business, where the company said there are “substantial” growth opportunities, while it will open several stores at Orlando and Portland airports.
WH Smith said its disappointing UK high street sales were in line with expectations, and added that it was on track to achieve full-year cost savings of £11m.
Carl Cowling, the chief executive of WH Smith, said: “The group is in a strong position, and while there is some economic uncertainty, we are confident of another year of good growth in 2025.”
Shares in WH Smith’s eponymous parent company, listed on the London Stock Exchange, rose by as much as 7% on Wednesday morning, making it the second-biggest riser on the FTSE 250 index of mid-sized companies.
The company is in talks with a handful of potential bidders for its high street shops, which could fetch about £100m, having kicked off the prospective sale process at the end of last year.
Interested parties for the chain are thought to include: the financial investors Alteri, the owner of Bensons for Beds; Hilco, the former owner of HMV and Homebase (both of which fell into administration); and Modella Capital, the owner of Hobbycraft.
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It is understood that the use of the brand itself would be up for negotiation with any prospective buyer.
Analysts said WH Smith’s trading update highlighted why the company was aiming to sell off its traditional high street business.
Susannah Streeter, the head of money and markets at the broker Hargreaves Lansdown, said WH Smith is facing the same challenges that prompted the collapse of other retailers such as Wilko, as it struggles against online rivals.
“It’s a hugely competitive market for stationery, books, music and entertainment, with online retailers typically able to undercut bricks-and-mortar stores with their higher overheads,” Streeter said.
“There are hopes that buyers will be found to remove what’s been more of a burden than a diversified blessing. However, off-loading outlets in struggling locations won’t be easy.”
Analysts have warned that if WH Smith does find a buyer, it would be unlikely to keep all 500 high street stores.
