Industry experts say at least half of WH Smith's 500 high street stores could be shut down by new owners, increasing the likelihood of wiping job losses at sick retailers.
The final size forecast for a chain employing around 5,000 people in high street shops ranges below 250 stores. The group's offer is expected in the coming weeks, with the transaction being completed by early May.
WH Smith is in talks with potential bidders, including Modella Capital, owners of Hilcocraft, and Private Equity Groups Hilco and Alteri, owners of HMV. At UK stations, airports, and hospitals.
It is expected to pay £100 million, including Richard & Judy Book Club brand, 200 sites including the large post office, and assets that include the right to distribute Toy R US products in the UK.
But Jonathan Pritchard, retail analyst at investment bank Peel Hunt, suggests that its £100 million figure is “low risk,” with businesses having a profit of less than £16 million in central costs and profits. suggests that there is a high possibility of raising the Online Business Funky Pigeon, which is not part of the sale, was considered.
WH Smith is believed to have told bidders that the cost, which is more central than the Pritchard calculation, is not bothering and that no stores will make much of a loss.
However, the experienced retail boss said it is likely that buyers want almost half of the stores. Some sites are great, but obviously not. ”
The average lease length is less than two years, with some real estate experts saying there is an opportunity to reduce the portfolio to “hardcore” in stores, and a large post office, including 200 outlets, is being held. He said it is most likely.
WH Smith has already cut down on the High Street Estate, with 2024 and 17 planned this year.
“No one will buy WH Smith without having to go into any restructuring process,” said real estate expert Jonathan de Mello.
Another real estate expert said: “Many stores are underinvested. There are places that are declining but still effective on the high street, but I can't see the White Knights coming on the horizon. It makes money, but not so much , and it's hard to make money. It's running to the absolute bones.”
Some retailers expect unwanted stores to be sold at Parcels to retailers like Marks & Spencer and The Range.
Pritchard said that if Smith was a dramatically more robust business route, retailers were already in the move.
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“They have done a great job with their assets,” he said. “The stores aren't necessarily invested in [are] On a high avenue where footsteps are fading. ”
A real estate expert added that brands will lose their relevance unless they retain their presence in a wide range of convenient locations. They suggested that potential buyers may even seek dowry to wear the full chain.
It is understood that such plans are not on the cards, but real estate experts may have to provide support to ensure Smith is a deal that saves decent chunks of the chain. I said it wasn't possible. “If Smith begins closing the post office, the British people will be violent. PR will be horrifying,” they added.
Smith said it doesn't necessarily mean that they'll sell unless a strong offer emerges, but DeMelo said it's unlikely that the company will retreat as it took PR Flak in the deal.
“Sometimes or later, a lot of real estate have to go, so they should just bite a bullet,” he said. “There are so many competitors in that space. Like Wilco and Woolworths, stores are irrelevant in today's modern retail market.”
