Modella Capital, which also owns Hobbycraft, will pay £76 million for the stores before rebranding them under the name TGJones following a “short transitional period”.
The approximately 480 high street stores involved in the deal sell a range of food-to-go options including sandwiches, snacks, confectionery and drinks and employ around 5,000 people. The wider WH Smith brand is not included in the deal.
All stores, colleagues, assets and liabilities of the high street business will move under Modella Capital’s ownership, while current CEO Sean Toal will remain at the helm.
“I have every confidence that under Modella’s leadership, the business will go from strength to strength, and I look forward to all that we can achieve together in the future,” Toal said.
The transaction is expected to be completed in the final quarter of the group’s current fiscal year, and remains subject to regulatory approval.
WH Smith chief executive, Carl Cowling, said that the deal enabled the group to focus exclusively on its travel business, which accounts for around 75% of revenue and 85% of its trading profit.
“As our Travel business has grown, our UK high street business has become a much smaller part of the WHSmith Group,” Cowling explained.
“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 WH Smith leadership team to focus exclusively on our Travel business. I wish the high street team every success.”
Commenting on the deal, a Modella Capital spokesperson said that the business believes in the future of high street, before explaining the decision to rebrand the stores under the name TGJones.
“TGJones feels like a worthy successor to the WHSmith brand,” the spokesperson said.
“Jones carries the same sense of family and reflects these stores being at the heart of everyone’s high street.”
In related news, convenience foods manufacturer Greencore has reportedly returned with an improved bid for Bakkavor.
The news was first reported by Bloomberg News, but both firms have declined to comment.
