WHSmith’s High Street stores to become TGJones in £76m deal

WHSmith has sold its High Street business to Modella Capital in a £76m deal that will see the stores rebranded as TGJones.

All 480 stores, its Swindon based Support Centre, and 5,000 employees will move over to Modella, which already owns Hobbycraft.

WHSmith’s strategy has been to become a global travel retailer. It was already generating 75% of its £1.5bn revenue, and a greater proportion of its trading profits, from 1,200 sites in locations including airports, railway stations and hospitals in 32 countries.

Carl Cowling, group chief executive of WHSmith, described the deal as “a pivotal moment for WHSmith”.

He said: “With the ongoing strength in our UK Travel division, and the scale of the growth opportunities in both North America and the rest of the world, we are in our strongest ever position to deliver enhanced growth as we move forward as a pure play travel retailer.

“As our Travel business has grown, our UK High Street business has become a much smaller part of the WHSmith Group.

“High Street is a good business; it is profitable and cash generative with an experienced and high-performing management team. However, given our rapid international growth, now is the right time for a new owner to take the High Street business forward and for the WHSmith leadership team to focus exclusively on our Travel business.”

The High Street business, which will continue to be led by current chief executive Sean Toal, is “profitable and cash generative”.

The shops being sold will operate for a short period under the WHSmith brand whilst the business rebrands as TGJones.

The deal doesn’t include online business funkypigeon.com, and strategic options, including a possible sale, will now be explored.