WHSmith has completed the sale of its high street business to private equity firm Modella Capital — but at a reduced price after weaker trading conditions led to a last-minute renegotiation.
The retailer will now receive up to £40m from the deal, down from the £52m originally agreed when the sale was first announced in March.
WHSmith confirmed it has received £10m upfront, with a further £20m in deferred consideration tied to the future cash flow of the business through to August 2026. An additional £10m may be realised depending on the timing and recovery of specific tax assets.
Modella, which owns Hobbycraft, will take on 480 WHSmith stores and 5,000 employees as part of the deal. The 233-year-old retail chain is expected to be rebranded as TG Jones.
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WHSmith said that following the March announcement, “the future of the high street business under a change of ownership has led to a more cautious outlook amongst stakeholders,” combined with “a period of softer trading” which had “resulted in a reduction in the ongoing cashflow of the business.”
The company said the original deal was “no longer deliverable” and it had “reflected carefully on the options and alternatives” before renegotiating terms.
Transaction and separation costs remain unchanged at £27m.
The group added the deal supports its strategy to focus on travel retail and international growth, with it now positioning itself as a “pure play global travel retailer,” with operations across airports and railway stations worldwide.
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