November 2, 2018

WHSmith is coming to an American airport near you…


Remember when we reported WHSmith were voted this year’s worst High Street retailer in the UK? Well guess what, my American friends – soon you’ll be able to enjoy the WHSmith ‘experience’ for yourself as the company is buying travel retailer InMotion, who own 114 stores across 43 airports in the United States.

To be fair, I am being a little unjust to WHSmith. Their High Street business is a shitshow (let’s remind ourselves of the painfully marvellous @WHS_Carpet Twitter account, neatly pointing out their failings) but WHSmith Travel is a separate beast, profit-wise at least. The side of the company that has stores and kiosks at stations and airports, motorway service stations and universities includes 570 outlets in the UK and a has a presence in over 20 countries and over 60 airports worldwide. Benedicte Page at The Bookseller reports that this financial year, WHSmith declared its Travel total revenue up 10% while High Street total revenue is down 1%.

As the High Street business continuing to struggle, it was announced last month that six loss-making stores will be closing. And the BBC have just reported that WHSmith have been fined £337,500 and ordered to pay an agreed settlement of £135,492.66 after a 64 year-old women suffering life-changing injuries when she fell down an open basement trapdoor in a store in Taunton, Somerset.

It therefore not really surprising expansion is planned on the travel side of the business, which overall currently makes up two-thirds of WHSmith profits.  But be prepared to be disappointed if you thought this was good news for books… InMotion sells a range of digital accessories including headphones and earbuds, travel accessories, mobile power, portable speakers and action cameras. In fact WHSmith’s book business isn’t the healthiest: like-for-like revenue in this sector to the end of August 2017 was down by 4%

Stephen Clarke, WHSmith group chief executive said on the American acquisition, as reported by Page:

“InMotion is a highly successful pure play travel retailer in the world’s largest travel retail market. The acquisition of InMotion is an exciting value creation opportunity for the WH Smith Group and marks a major step in our international travel retail growth strategy.  It doubles the size of our international travel business and provides us with attractive growth opportunities.

“The travel retail market in North America for digital accessories offers significant growth potential.  As the market leader, recognised for its best-in-class customer service, InMotion is well positioned to take advantage of that potential.

“In addition, InMotion provides us with a scalable platform to launch the W H Smith airport format into the US, the world’s largest travel retail market for news, books and convenience products.

“Finally, building on our recent successes in the digital accessories category in the UK and on InMotion’s supplier relationships and experience, we see significant potential to accelerate growth outside of the US using the InMotion format.

“InMotion is run by a very experienced senior management team and we look forward to working with the CEO, Jeremy Smith, and his team to further develop both businesses across North America and other territories.”

The deal will cost WHSmith £153 million ($198 million) and according to Page, a new four-year term loan of £200 million ($258m) has been put in place to support the transaction, as well as the company’s credit facility of £140m ($180m) being extended, now due to expire in December 2023.

Completion of the deal is expected before the end of 2018. Bamboo flutes for all!





Nikki Griffiths is the managing director of Melville House UK.