May the revamp of WH Smith help salvage its current standing?
WH Smith, a storied retailer on Britain's high streets, has decided to part ways with its 480 brick-and-mortar outlets, selling them to Modella Capital for £76 million. The venerable WH Smith brand will persist independently, focusing solely on its travel unit. The new owner plans to revitalize the divested stores under a new identity - TG Jones.
The travel sector has experienced significant growth, as WH Smith caters to travelers with last-minute essentials, snacks, books, and the like, in airports and train stations worldwide. Unfortunately, the high-street stores have struggled to remain profitable, and the weight of the British high street has become an albatross for the retailer.
With a 20% decrease in the share price over the past year, change was imperative. By shedding the ailing high-street stores, WH Smith can now focus on the thriving parts of its business and jettison the often tired stores in provincial and market towns selling a motley collection of books, stationery, and snacks.
The new management team is eager to establish TG Jones as a fresh and exciting brand, excitedly announcing their plans. However, some question whether the brand change will be beneficial, as it carries the risk of confusing customers. WH Smith has endured, despite the decline in its core market, due in large part to the strength of its brand. The unproven TG Jones, on the other hand, lacks a brand identity.
Additionally, the brand change may divert management's attention away from improving the in-store experience. The former management, it appears, favored the travel unit and neglected the high-street shops, which compete against other successful brands like Waterstones, The Works, and Card Factory.
The legacy of the strong WH Smith brand may be the only thing keeping the chain afloat in the face of formidable challenges. The transition to TG Jones could prove challenging, with the possibility that the new brand may struggle even more than WH Smith did, potentially facing the same fate as defunct brands such as Woolworths and Dixons.
The company remains solvent, and there is no talk of a company voluntary arrangement for TG Jones at this time. While the long-term outlook remains uncertain, the transformation represents yet another example of shifting trends in the UK retail industry, as companies seek to reposition themselves for survival in the challenging high-street environment.
In the midst of changing trends, WH Smith's new venture, TG Jones, aims to revitalize the divested stores, transitioning from a storied retailer with profitable travel units to a fresh brand in the home-and-garden, finance, and lifestyle sectors. However, the success of TG Jones is uncertain, as it faces potential customer confusion and competition from established brands like Waterstones, The Works, and Card Factory, raising questions about its longevity, much like the defunct brands Woolworths and Dixons.
