WHSmith’s name is set to disappear from British high streets after more than 230 years of trading.
The retail chain is planning to sell its high street business without the rights to its brand name.
The move comes as part of WHSmith’s strategy to focus on its core travel business, as announced in late January.
First-round bids for the high street chain were submitted last week, with investment firms Alteri and Modella Capital showing interest in the acquisition.
WHSmith is planning to sell its high street business without the rights to its brand name
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The auction process is being run by bankers from Greenhill, according to The Sunday Times.
Both Alteri and Modella Capital specialise in buying and restructuring distressed retailers.
Canadian tycoon Doug Putman, who previously rescued HMV, is also reportedly among potential buyers.
WHSmith “is understood to believe that it is not practical to have two separately owned businesses trading under the same brand,” according to The Times.
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The move comes as part of WHSmith’s strategy to focus on its core travel business
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Shares in WHSmith closed 0.3 per cent lower at 1,159.00 pence in London on Friday.
The culmination of a sale would almost certainly result in the disappearance of a high street brand that has been an ever-present since 1792.
The Times noted this “will raise concerns that the retail group is seeking to distance itself from any fallout from the sale”.
Potential buyers will be set a timeframe under which they would need to relinquish the brand name.
While licensing the WHSmith brand name is understood to be unlikely, it is not entirely out of the question.
WHSmith’s high street arm currently operates 500 stores across the UK, with almost 200 containing a post office.
The average lease length for these stores is just two years, which could allow a new owner to quickly close underperforming outlets.
The high street business generated a trading profit of £32million on sales of £452million in the year to August.
WHSmith’s high street arm currently operates 500 stores across the UK
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Like-for-like sales fell three per cent in the high street business during the 21 weeks to January 25.
The group’s travel retail business, which trades under the WHSmith banner as well as InMotion and MRG, generates 85 per cent of the group’s profit.
Any new owner will face significant challenges, including subdued consumer spending and rising costs.
Increases in the minimum wage and employers’ National Insurance contributions will add £20million to WHSmith’s cost base this year.
Retail expert Richard Hyman of Aria Intelligent Solutions consultancy said: “WHSmith has a very disparate product offering and the brand name has been the glue that has held it together – without that it’s going to be very difficult [for a new buyer].”
The retailer started as a news vendor and once owned bookseller Waterstones and music retailer Our Price.
The company enjoyed its “halcyon days” in the 1970s and 1980s.
As shoppers began deserting the high street, WHSmith responded by cutting costs and reducing investment in its high street stores.
Despite this, Patrick O’Brien, retail research director at GlobalData, said the brand still “has a place in the nation’s heart”.