Latest news with #BritishHighStreet
The Independent
6 days ago
- Business
- The Independent
The big change looming for WH Smith shoppers
WH Smith is set to finalise the sale of its UK high street chain to Modella Capital, owner of Hobbycraft, by the end of this month for £76 million. The deal will result in WH Smith stores on British high streets being rebranded as TG Jones, with approximately 480 stores and 5,000 employees transferring to Modella Capital. WH Smith's travel division, including shops in airports, train stations, and hospitals, reported a 5 per cent increase in like-for-like sales for the quarter ending 31 May. Half-year results in April revealed a 25 per cent decline in profits for the high street chain, falling to £20 million, prior to the impending sale. Russ Mould, investment director at AJ Bell, said that WH Smith needs to step up its performance, particularly in the US, after selling its UK arm.
The Independent
6 days ago
- Business
- The Independent
WH Smith could disappear from UK high streets within weeks
WH Smith is on track to finalise the sale of its UK high street chain to Modella Capital, the owner of Hobbycraft, by the end of this month. The £76 million deal, agreed upon in March, will result in the WH Smith brand being replaced by TG Jones on British high streets. As part of the agreement, approximately 480 stores and 5,000 employees will transition to Modella Capital's ownership. In an update released ahead of the sale's completion, WH Smith reported strong performance in its remaining travel division, which includes shops in airports, train stations, and hospitals. Like-for-like sales in this division increased by 5 per cent in the quarter ending 31 May. The company did not disclose third-quarter figures for the high street arm due to the impending sale. However, half-year results in April revealed a 25 per cent decline in profits for the chain, falling to £20 million. In the UK, its travel arm delivered a 6 per cent rise in like-for-like sales over the third quarter, with airport shops outperforming the rest of the estate, with a 7 per cent rise. It said it recently opened its first Smith Family Kitchen coffee offering in an airport, as well as a new standalone bookshop. Across its North America travel chain, comparable store sales rose 2 per cent but were up 7 per cent on a total and constant currency basis. In the rest of the world, like-for-like sales were 7 per cent higher and surged by 12 per cent on a total and constant currency basis. The group said: 'While we are mindful of the broader economic and geopolitical uncertainty, the group is well positioned as we enter our peak summer trading period.' The sale of its high street arm comes after years of under-pressure sales and profits at the division, while WH Smith's travel business has grown to make up the bulk of its sales and profits, with more than 1,200 stores across 32 countries. Buyer Modella Capital specialises in investing in retailers. It has previously put money into chains including Paperchase and Tie Rack, while in August last year, it snapped up arts and crafts retailer Hobbycraft for an undisclosed sum. Russ Mould, Investment Director at AJ Bell, said: 'With the sale of its high street business set to complete in a matter of weeks, WH Smith's trading update presents a picture of what the slimmed-down company looks like going forward. It's all about convincing time-pressed travellers to pay a premium for goods on the go. 'It's a starting point for investors to better understand the shape and potential of the business, and to get a feel for growth rates over the long term from what is essentially now a travel-hub company with a few shops in hospitals on the side. With that in mind, there is a sense that investors might be expecting more from WH Smith than it is currently delivering. 'The US has been a laggard for the group in recent years and has some catching up to do. Overall, WH Smith needs to step up a gear and prove it was worth flogging the cash cow that was the UK arm.'
The Sun
7 days ago
- Business
- The Sun
WHSmith update as sale ‘on track' for this month before it disappears from high streets
THE sale of 480 WHSmith stores is set to complete this month before the brand disappears from the high street for good. The deal to sell off the branches to Hobbycraft owner Modella Capital is set to be finalised by the end of June, WHSmith said. 1 The deal, which was agreed in March, will see the WHSmith name disappear from British high streets. The stores will be replaced with new brand TGJones. All of the 480 WHSmith stores and 5,000 staff working for the high street arm of the retail chain will move under Modella Capital's ownership as part of the deal. It comes as WHSmith said in an update its remaining travel division, which includes shop in airports, train stations and hospitals, saw like-for-like sales up 5% in the quarter to May 31.
Yahoo
17-05-2025
- Business
- Yahoo
Hundreds of Poundland stores to close under rescue deal
Thousands of high street jobs are at risk in a Poundland rescue deal that could trigger sweeping store closures. Bidders for the beleaguered retailer have identified as many as 200 loss-making stores that could be ditched as they put the finishing touches to takeover proposals this weekend. Formal offers are scheduled to be tabled on Monday, with a handful of investors still in the running. Industry sources said the discount chain was unlikely to survive without a large number of store closures, leaving another hole in the British high street. Poundland employs 15,000 people across a total of 825 UK shops. It is understood that any new owner would look to jettison as much as a quarter of the estate within weeks of taking control. Turnaround firms Hilco, Modella Capital, and Gordon Brothers are understood to be among a handful of shortlisted bidders. Pepco put Poundland up for sale in March as its fortunes plummeted, unveiling the move alongside a plan to buy back €200m (£168m) of its own stock. Its shares, which are listed on the Warsaw stock market, leapt as much as 11pc on the news. Despite generating revenues of more than €2bn in 2024, Pepco bosses said Poundland had been a 'drag on the group's financial performance – with lower revenue growth, lower gross margins, higher costs to operate, and consequently, lower profitability and returns on invested capital'. Rachel Reeves's National Insurance tax raid had also aggravated the situation, the company said, as it piled 'further pressure to Poundland's cost base'. Months earlier, Pepco had slashed Poundland's value by nearly £650m, as it blamed a 'significant decline in performance' and spiralling costs. Under new owners, closures are expected to be accompanied by a significant cash injection to help return Poundland to profitability. Analysts estimate it will require tens of millions of pounds to spearhead the turnaround. The chain will also need a fresh debt package as its current lenders seek to get out. Prospective backers anticipate having to immediately pump in between £70m and £100m in order to stabilise the company. Though Poundland is part of Polish-based Pepco Group, its fate is ultimately in the hands of a pack of Wall Street hedge funds, which bailed out Pepco's former South African owner Steinhoff in 2021. The US investment firms, which are thought to include the $38bn fund Silver Point, stepped in after Steinhoff defaulted on billions of pounds of debt. Retail sources have pointed to a move away from Poundland's 'everything's a pound' slogan almost a decade ago as a contributing factor in its decline. Products have since been priced between 50p and £5 instead. The company has also admitted that an attempt to save costs by cutting back on suppliers backfired. 'It became clear as the year progressed that both the planning and execution of this implementation had shortcomings, with gaps in clothing and general merchandise for the UK customer, impacting revenues and profitability during the year,' the company said in December. Pepco's owners also include Davidson Kempner, which manages nearly $40bn (£30bn) of funds, and has seized control of American retailers J Crew and Neiman Marcus through so-called 'loan to own'. In both, it exchanged debt for equity via Chapter 11 bankruptcy proceedings. Hedge funds swooped on Steinhoff in 2017 after the company owned up to financial irregularities, hoovering up its bonds and bank debt. They later converted their loans into a majority stake. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Telegraph
17-05-2025
- Business
- Telegraph
Hundreds of Poundland stores to close under rescue deal
Thousands of high street jobs are at risk in a Poundland rescue deal that could trigger sweeping store closures. Bidders for the beleaguered retailer have identified as many as 200 loss-making stores that could be ditched as they put the finishing touches to takeover proposals this weekend. Formal offers are scheduled to be tabled on Monday, with a handful of investors still in the running. Industry sources said the discount chain was unlikely to survive without a large number of store closures, leaving another hole in the British high street. Poundland employs 15,000 people across a total of 825 UK shops. It is understood that any new owner would look to jettison as much as a quarter of the estate within weeks of taking control. Turnaround firms Hilco, Modella Capital, and Gordon Brothers are understood to be among a handful of shortlisted bidders. Pepco put Poundland up for sale in March as its fortunes plummeted, unveiling the move alongside a plan to buy back €200m (£168m) of its own stock. Its shares, which are listed on the Warsaw stock market, leapt as much as 11pc on the news. Despite generating revenues of more than €2bn in 2024, Pepco bosses said Poundland had been a 'drag on the group's financial performance – with lower revenue growth, lower gross margins, higher costs to operate, and consequently, lower profitability and returns on invested capital'. Rachel Reeves's National Insurance tax raid had also aggravated the situation, the company said, as it piled 'further pressure to Poundland's cost base'. Months earlier, Pepco had slashed Poundland's value by nearly £650m, as it blamed a 'significant decline in performance' and spiralling costs. £100m cash injection Under new owners, closures are expected to be accompanied by a significant cash injection to help return Poundland to profitability. Analysts estimate it will require tens of millions of pounds to spearhead the turnaround. The chain will also need a fresh debt package as its current lenders seek to get out. Prospective backers anticipate having to immediately pump in between £70m and £100m in order to stabilise the company. Though Poundland is part of Polish-based Pepco Group, its fate is ultimately in the hands of a pack of Wall Street hedge funds, which bailed out Pepco's former South African owner Steinhoff in 2021. The US investment firms, which are thought to include the $38bn fund Silver Point, stepped in after Steinhoff defaulted on billions of pounds of debt. Retail sources have pointed to a move away from Poundland's 'everything's a pound' slogan almost a decade ago as a contributing factor in its decline. Products have since been priced between 50p and £5 instead. The company has also admitted that an attempt to save costs by cutting back on suppliers backfired. 'It became clear as the year progressed that both the planning and execution of this implementation had shortcomings, with gaps in clothing and general merchandise for the UK customer, impacting revenues and profitability during the year,' the company said in December. Pepco's owners also include Davidson Kempner, which manages nearly $40bn (£30bn) of funds, and has seized control of American retailers J Crew and Neiman Marcus through so-called 'loan to own'. In both, it exchanged debt for equity via Chapter 11 bankruptcy proceedings. Hedge funds swooped on Steinhoff in 2017 after the company owned up to financial irregularities, hoovering up its bonds and bank debt. They later converted their loans into a majority stake.
