Critics often said that if WHSmith didn’t exist, no one would bother to invent it. Yet, as things stand, there are at least two private equity firms battling it out to acquire the brand, even if it likely won’t come with the name.
According to recent reports, the race for WHSmith is down to the final two bidders: Alteri Investors and Modella Capital. Both firms have experience with buying and taking over distressed retailers, with Alteri snapping up Bensons for Beds in 2020, and Modella Capital taking over Hobbycraft in 2024, and recently completing a deal for The Original Factory Shop in February this year.
As WHSmith turns all of its focus to its travel division, questions have arisen over what the new owner could do with its beleaguered and severely unloved high street division.
A source told The Times this month that bidders were attracted to WHSmith because of its “strength across multiple product categories and its clear hub of the high street strategy”.
There is an opportunity to add new categories or strengthen existing ones. Of its 500 high street stores, around 200 have a Post Office and around 75 have Toys R Us concessions.
While one city analyst told Retail Week “the Post Office has to stay”, as it provides a lifeline for shoppers who can’t access a bank or digital services as well as being a huge footfall driver, he believes that Toys R Us “won’t move the dial” for customers.
However, High Street Positives data analyst and founder, Laura Harris, can see the appeal for both being kept by new owners.
She points to a coffee shop partnership for those waiting at the Post Office, better store design, and leveraging Toys R Us and school stationery tie-ins to engage younger audiences.
“WHSmith is a staple of the high street—with the right vision, it could become a very modern retail experience, tapping into its loyal audience while attracting new customers,” she said.
“I think the potential is huge for the new owners and for the high street with a huge opportunity to revitalise these spaces.”
One retail adviser said there is interest in both Toys R Us and the Post Office—but that books, which are already a part of WHSmith’s high street arm, could become a main focus again with an expanding offer.
“When I’ve done research on Waterstones in the past, it seems if shoppers aren’t bookworms, they won’t go in,” he said. “There is a role for a mainstream lower-mid market, books, stationery, and news operation in WHSmith but not in 500 stores.”
He is also unclear on the ambitions of Alteri and Modella in terms of what they want to do with the stores.
“Both have a precedent in giving things a go with a track record of rebuilding things,” he says. “Alteri rebuilt Bensons from scratch. I suspect there are some [WHSmith] sites that are not worthwhile on a standalone business, and you can rebuild a smaller, more profitable, and more valuable chain almost from the ground up.”
“I think the potential is huge for the new owners and for the high street with a huge opportunity to revitalise these spaces”
Laura Harris, data analyst and founder, High Street Positives
WHSmith has repeatedly said they will keep stores open but only if they are profitable. While some of its high street stores have closed over the years, there is an opportunity to open in new places with a refreshed, relevant offer and operate with short-term leases.
How that looks remains uncertain, as it has been widely reported that the name will disappear from the high street.
The city analyst says there is a “lot of chat” surrounding this, but he believes the WHSmith name is “very effective in generating shareholder value”.
He thinks its current offer still suffices and that a new owner could continue to deliver that.
“The bit that makes most of the money is on the stationery side. Moving away from that would be an interesting diversion.”
A deal is being targeted for some point in April, and only then will the future of WHSmith’s high street be clearer with a new owner, and likely a new name and offering.
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