New bank loan and US investment as retailer aims to expand global travel arm
WHSmith has today, 25 March, confirmed that it has secured £200million from US investors alongside a £120m bank loan as the UK-based group looks to expand its global travel retail business.
With the 500-store High Street arm looking set to be sold off and the company name disappearing from UK towns after 233 years, the group is concentrating on its lucrative travel arm, which now produces three-quarters of the its revenue and 85% of its trading profit from its 1,200-plus outlets in 32 countries.
Chief financial officer Max Izzard said: “We are pleased to have successfully completed our refinancing, which includes our first US private placement and a new bank term loan.
“The refinancing strengthens our balance sheet, extends our debt maturity profile, and diversifies our capital structure. It also gives the group access to a new debt investor base in the future, and we are pleased to have the continuing support of our banking partners.”
The company said this move will diversify WHSmith’s sources of debt financing and extend its debt maturity profile ahead of a convertible bond maturity in May 2026 – the USPP notes have a maturity of seven, 10 and 12 years, and the three-year bank loan with Fifth Third Bank National Association, HSBC UK Bank PLC, Banco Santander SA, London and Skandinaviska Enskilda Banken AB (PUBL) can be extended to four or five years subject to lender approval.
While the High Street arm, where greeting cards and gift wrap make up a significant chunk of sales along with stationery, books and convenience items, remains a profitable part of the business – it turned over a £32million profit in the trading year to August 2024 from sales of £452m – it is becoming increasingly less aligned with the company’s focus on the expanding international travel side.
There are 5,000-plus staff across more than 500 stores, of which around 200 also have 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.
