Post Office at Maidenhead WHSmith to remain despite sale of high street stores

The Post Office in Maidenhead’s WHSmith branch will remain, despite the retailer selling off its UK high street business.

WH Smith PLC has agreed to sell 480 of its stores across the UK to Hobbycraft owner Modella Capital, in a £76m deal.

The WHSmith store in the Nicholsons Centre also houses a Post Office.

Modella Capital has confirmed that while the stores will be rebranded as TGJones, they will keep the same products and services – including the Post Office and Toys R Us. 

The stores will continue trading as normal while Modella Capital works with the management team to 'define and execute' a strategy to bring in new ranges and other offerings 'in the future'. 

The acquisition includes stores on high streets, in shopping centres and at retail parks across the UK, with WH Smith retaining its travel stores.

The deal will give the high street business arm an enterprise of £76m ‘on a cash and debt-free basis’.

But WHSmith revealed that while it will have £52m gross cash proceeds, it is anticipated the company will only get £25m following ‘transaction and separation costs’ adjustments.

The company which sells a range of products such as stationery and books, employs 5,000 staff members.

Carl Cowling, group chief executive for WH Smith, said: "As we continue to deliver on our strategic ambition to become the leading global travel retailer, this is a pivotal moment for WHSmith as we become a business exclusively focused on Travel.

“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.

“I wish the High Street team every success.”

All stores, staff, assets and liabilities of the high street business will move under the ownership of Modella Capital as part of the deal.

Under the new ownership, the business will be led by Sean Toal, who is currently the CEO of the WHSmith’s High Street division.

The stores will operate for a short transitional period as WHSmith, while the rebrand takes place.

The WHSmith brand is not included in the sale and the group’s travel divisions will continue trading as usual under the brand across 32 countries.

This will include at major airport locations, railway stations and hospitals across the UK.

The transaction will enable WHSmith’s management to ‘concentrate on capturing the substantial growth opportunities in its key travel markets with a clear focus on driving shareholder value’.

Modella Capital has acquired a range of brands under its portfolio including Hobbycraft, Create & Craft, Crafter’s Companion and The Original Factory Shop.

The company now owns more than 800 stores under its range of brands.

A Modella spokesperson said: “We are delighted to have been the successful bidder for one of the UK’s most iconic retail businesses.

“Modella Capital believes strongly in the future of the high street, and we are delighted to have the opportunity to take a heritage brand and develop it further in the coming years.

“TGJones feels like a worthy successor to the WHSmith brand.”

Modella said it will be ‘business as usual’ while the company works on a strategy to introduce new ranges at the high street stores.