WH Smith’s Historic Transformation: A New Chapter Begins

The iconic name of WH Smith, a staple of UK town centres since the Victorian era, is set to disappear from the High Street. The company has agreed to sell its shops to Hobbycraft-owner Modella Capital, which plans to rebrand the High Street chain as TGJones. While the WH Smith name will remain at strategic locations such as airports, railway stations, and hospitals, the high street transformation marks a new era for the famed retail chain.

The Sale and Transition

Modella Capital will acquire 480 stores in retail parks, shopping centres, and High Streets, including a workforce of 5,000 staff. As part of the transition, Modella confirmed it will retain the Post Office outlets operating within many branches and the Toys “R” Us concessions.

However, the company has not commented on potential job cuts, leaving retail analysts speculating that the private equity firm will scrutinize the performance of its acquired assets closely. As Modella specializes in retail and consumer businesses, having invested in companies like Crafters’ Companion and The Original Factory Shop, the move to acquire WH Smith reflects its strategy to bolster its retail portfolio.

A Storied History

WH Smith’s history dates back to 1792 when it first opened on Little Grosvenor Street in London, later evolving to become the nation’s principal newspaper distributor. The brand’s expansion into travel retail commenced with its first store at London’s Euston station in 1848, subsequently thriving through the post-war years with a diverse product offering.

During the 1970s, the chain embraced contemporary style with a new brown and orange logo. Over decades, WH Smith evolved into a diverse shopping destination that appealed to a wide range of customers—from students buying school supplies to shoppers perusing magazines, art supplies, tech gadgets, and more.

Challenges and Rebranding

Despite its rich history, recent years have been challenging. WH Smith faced stiff competition from budget High Street shops, supermarkets, and online retailers, which led to the brand’s reputation suffering, further blemished by critics on social media who mocked the deteriorating conditions of its stores.

Given these challenges, Carl Cowling, WH Smith’s group chief executive, described the £76m sale as “a pivotal moment” for the company to focus exclusively on its travel-related operations, which have become the core of its financial success. With over 1,200 stores in 32 countries, the travel division is now at the helm of WH Smith’s operations, generating significant revenue and profit.

The Future Under TGJones

Retail analysts and consultants have weighed in on the future prospects of the rebranded chain:

• Nicholas Found from Retail Economics anticipates the new owners will concentrate on cost management and profitability, optimizing the short leases characteristic of WH Smith to possibly streamline unprofitable stores or invest in much-needed upgrades.
• Catherine Shuttleworth from Savvy sees opportunities in expanding Hobbycraft’s presence, potentially appealing to a younger, craft-loving audience on the High Street.
• Susannah Streeter from Hargreaves Lansdowne believes that although the new TGJones brand will take time to establish itself, there will be keen interest in how Modella can revamp sales and potentially introduce competitive pricing strategies.

While Modella Capital claimed the TGJones name embodies a sense of family akin to WH Smith, the transition marks a nostalgic farewell for many customers who have relied on the brand for over two centuries. However, as the name fades from the High Street, the travel sector continues to be WH Smith’s “engine room,” a vital component contributing significantly to the company’s overall revenue and trading profit.

Conclusion

As WH Smith embarks on this new chapter under Modella Capital’s ownership, the potential for revitalizing the High Streets through thoughtful rebranding and strategic adjustments offers a glimmer of hope for the chain’s rebirth. The success of this transition may well hinge on how effectively TGJones can balance innovation with nostalgia, creating a sustainable model that resonates with the dynamic needs of modern consumers.

Source: https://www.bbc.com/news/articles/cj3n3en7gppo