WH Smith has decided to sell its UK retail chain to Hobbycraft owner Modella Capital in a deal valued at £76 million (€90 million) and the chain is expected to eventually be rebranded as TG Jones.
The deal will not affect retail outlets such as airport and train station stores, or the WHSmith brand.
As a result of the sale, approximately 480 stores and 5,000 employees working in large retail outlets will be transferred to Modella Capital.
Following the completion of the deal, the WH Smith name will disappear from the high street and be replaced by the TGJones brand.
The travel services division, which has become an important part of the group in recent years and includes hospital shops, will remain unchanged.
This area brings in a significant portion of the company's revenue and profit, and today the total number of stores exceeds 1,200 in 32 countries.
High street stores have become a “significantly smaller part” of the group's business, its management said.
Group CEO Carl Cowling said: “While we continue to deliver on our strategy to become the world’s leading travel retailer, this is an exciting time for WHSmith as we become a pure play travel company.
“As our tourism business grows, the proportion of our high street business within the WHSmith Group continues to decline.
“Street retail is a successful business; it is profitable and generates income thanks to an experienced and highly effective management team.
“However, given our rapid international growth, now is the time for the new owner to develop the high street business and for the WHSmith team to focus solely on our travel business. I wish the high street team every success.”
The business transferred to Modella Capital is valued at £76m, net of cash and debt.
Modella Capital specializes in investing in retailers. It has previously invested in chains such as Paperchase and Tie Rack.
In August, the company acquired arts and crafts retailer Hobbycraft for an undisclosed amount.
The sale of WH Smith comes after a period of uncertainty, with several potential buyers expressing interest in acquiring the historic chain.
Private equity groups Hilco and Alteri were among those to express interest in a possible takeover after WH Smith initiated the process late last year.
Sourse: breakingnews.ie
