Departing WH Smith chief Stephen Clarke today signed off with a bang, taking a £312 million punt on a Las Vegas-based retail group.
The books-to-food retailer is buying Marshall Retail Group, which owns a string of airport gift shop brands with 170 stores in North America.
Clarke said MRG had long been an acquisition target and it “helps complete the toolkit which will make us very effective in competing with the market leaders in airport retailing the US”. MRG will sit alongside WH Smith and tech chain InMotion, bought for £155 million last year. The deal will be funded by a £155 million share placing and the stock rose 5% or 114p to 2202p.
Clarke steps down this month after six years in which he has continued the strategy of City favourite Kate Swann – managing cost cuts in its High Street arm and growing its travel business.
Today the retailer posted an 11% increase in revenues to £1.4 billion, with profits up 7% to £155 million in the 12 months to August 31. Same-store sales rose 1%.
Clarke said he leaves the business “in very good shape”. Carl Cowling, previously High Street managing director, will take charge.
Independent analyst Nick Bubb said Clarke had filled Swann’s “big shoes” and “he has proved the doubters wrong”.
Peel Hunt analysts Jonathan Pritchard said: “We bid a fond farewell to outgoing CEO Stephen Clarke, who leaves a business in tremendous shape, better than when he took over.”
He added that the MRG deal “completely galvanises the travel side of WH Smith, making it a major player in the States and now one of the serious names in global travel retail.”
