WH Smith has reported a drop in High Street sales after it said it was planning to sell 500 of its UK shops.
Its High Street sales fell 6% in the 21 weeks to January 25, covering the key Christmas period, down 3% on the previous year.
The company already has plans to close 17 UK stores in 2025, having closed 14 during the past financial year.
But despite struggles on the High Street, WH Smith saw a boost from its travel arm, saying its travel business “delivered another excellent performance”, with plans to expand in the US.
Carl Cowling, group chief executive said: “The group is in a strong position, and while there is some economic uncertainty, we are confident of another year of good growth in 2025.”
The historic UK business, which was established 233 years ago, confirmed it had held talks at the weekend regarding the possibility of selling its High Street stores, which employ about 5,000 people, to focus on its travel retail business, which operates from airports, train stations and hospitals.
It told the BBC that the post offices within 195 of its shops would remain should the sale of that part of its business goes ahead.
Julie Palmer, partner at Begbies Traynor, said the latest update from the retailer “demonstrates why WH Smith has pulled the plug on its ailing UK High Street operations after more than 200 years.”
“It would seem that Labour’s fateful decision to hit businesses with an even greater tax bill may have been the final nail in the coffin for WH Smith,” she said.
Ms Palmer thinks WH Smith may struggle to “easily find a buyer” given the challenges they would have to take on.
“It seems most likely that private equity will swoop in on the division and allow WH Smith to begin its next chapter as a pure play travel business, but it still very early days and a success outcome is by no means a certainty,” she said.
The travel retail business side of WH Smith now accounts for more than 85% of its profit and operates 1,200 stores across 32 countries.
The company said in its latest results that it planned to open more stores in US airports.
“In North America, we have seen a notable shift in like-for-like revenue growth, up 3%, as a result of the actions we have taken to enhance our ranges and introduce new categories,” Mr Cowling said.
He announced that the retailer has “won” contracts for eight stores at Orlando airport in Florida, on top of four more stores at Portland airport in Oregon and has plans for 60 stores in total in the US.
Back in the UK, the retailer said it left the Christmas trading period on track to deliver its target of full year cost savings of £11m.
Analysts have predicted its High Street business could be sold for £100m or more in the coming months.
Reports have suggested private equity suitors are eyeing a deal to take control of the retailer’s shops.
