WHSmith accelerates US expansion

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WHSmith Gatwick North Terminal
WHSmith Gatwick North Terminal

Following the UK high-street retailer’s purchase last year of US travel retailer InMotion, WHSmith has announced today, 17 October 2019, it has signed an agreement to acquire Marshall Retail Group (MRG) for $400m (c.£312m).

 

This acquisition marks the second US indie travel retailer to join WHSmith’s expanding travel retail portfolio and will effectively double the size of the UK company’s International Travel business. The proposed acquisition will be financed through a combination of new debt and equity.

 

In a statement the company said that approximately £155m will be raised through an underwritten equity placing, with the remaining to be financed through a new debt facility.

 

Carl Cowling, group chief executive of WHSmith effective 1 November 2019, commented:

“We are delighted to announce today the proposed acquisition of Marshall Retail Group. MRG is a highly successful US travel retailer with a fast-growing airport business.

 

“This acquisition will accelerate the growth of our International Travel business and combined with InMotion, the market-leading digital accessories airport retailer that we acquired last year, will significantly enhance our scale and growth opportunities in the US, a large and fast growing travel retail market.

 

“This is an exciting value creating opportunity, entirely in line with our strategy. I would like to take this opportunity to welcome Michael Wilkins, CEO, and the entire team across the Marshall Retail Group to the WHSmith Group and we look forward to working together to further develop our business across North America.”

 

The announcement came as WHSmith revealed group revenue was up 11% but just 1% like-for-like for the 12 months ending August 2019. Group profit before tax was £135m, from £134m in 2018.

 

Its High Street division showed revenue was down 2% to £580m, with a trading profit flat year-on-year at £60m. However, outgoing group chief executive Stephen Clarke commented: “In our High Street business, we have delivered another good performance. We continue to focus on improving our Stationery offer and this remains our key area of investment. As a result, we delivered a strong ‘Back to School’ period with good growth across many product categories.”

 

www.whsmithplc.co.uk

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