New owner Modella to rebrand stores as TGJones as possible Funkypigeon.com sale mooted
WHSmith has offloaded its High Street arm to Hobbycraft owner Modella Capital for £76million with all stores to be rebranded to TGJones – and Funkypigeon.com may also be up for sale.
In an announcement early this morning, 28 March, the group revealed its plans for the Travel divisions to continue to trade under the 230-year-old name in 32 countries, while the UK outlets will “operate for a short transitional period under the WHSmith brand while the business rebrands as TGJones”, the statement revealed.
The Curi-o-city brand has not been mentioned, but the statement added: “The sale does not include the group’s personalised online greeting card business Funkypigeon.com. The group will explore strategic options for this part of the group, including a possible sale.”
Highlighting the company’s “strategic ambition to become the leading global travel retailer” CEO Carl Cowling said: “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.”
According to Sky News the deal to take over the 500 stores, where greeting cards and gift wrap make up a significant chunk of sales along with stationery, books and convenience items, happened following a run-off between two private equity firms with Modella Capital winning out against Alteri investors
The division has remained profitable – it turned over a £32million profit in the trading year to August 2024 from sales of £452m – but became increasingly less aligned with the company’s focus on the expanding international travel side.
There are 5,000-plus staff, with which around 200 of the stores also operating a Post Office counter staffed by WHS employees, alongside dozens of Toys R Us shop-in-shops following the 2024 deal to host concessions reviving the UK bricks-and-mortar presence of the brand that went bust in 2018.
In this morning’s statement, the company said WHS has become a leading global travel retailer with over 1,200 Travel stores across 32 countries over the past decade, adding: “While profitable and cash generative, the UK High Street business has become an increasingly smaller part of the WHSmith Group.
“In the financial year ended 31 August 2024, 75% of the group’s revenue and 85% of its trading profit came from its Travel business. As the Group has successfully developed its Travel Essentials proposition, including a higher proportion of food and drink, health and beauty and tech accessories, its customer offer in Travel is increasingly different from that of its UK High Street business.”
The transaction is expected to complete in the final quarter of the group’s current fiscal year with anticipated gross cash proceeds of £36m at completion (subject to customary working capital adjustments based on timing of completion), a further £6m 12 months following completion, and up to £10m of additional proceeds based on timing and realisation of certain tax assets within the High Street business. Net cash proceeds, adjusting for transaction and separation costs, of around £25m are to be deployed in line with the group’s capital allocation policy.
The company was founded by Henry Walton Smith in 1792, with his youngest son William Henry taking over and the firm became WH Smith & Son in 1846 when his own son with the same name became a partner – and they opened the first railway station news store two years later.
