WHSmith is to buy US travel retailer Marshall Retail Group in a £312 million deal in a major expansion that will add 170 stores to its business Stateside.
The acquisition for $400 million in cash follows the newsagent and stationery chain's acquisition of US airport retailer InMotion last year. It comes as sales rose 11% across the entire WHSmith business to £1.4 billion, with travel sales up 22%, but its high street division fell 2% to £580 million. Pretax profits were up 1% to £135 million in the year to August 31.
Incoming WHSmith chief executive Carl Cowling said: "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."
Announcing the last set of results before he leaves, CEO Stephen Clarke added: "Internationally we have won a record number of units in the year, including significant wins in the Middle East, Australia and Europe and, more recently, our first WH Smith win in a major US airport. We now have 433 units open internationally, across 30 countries and over 100 airports.
"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."
Donald Brown, senior investment manager at Brewin Dolphin, said: “WH Smith continues to be a tale of two businesses. Despite the challenging retail backdrop, the group is delivering strong growth at its travel division, where its 1,019 units delivered a 22% rise in sales. This compared to flat sales on the high street, only supported by healthy stationery sales.
"The planned acquisition of the US-based Marshall Retail Group will add 170 new locations, including 59 at airports. This could be a significant move for WH Smith and a declared 8% increase in the final dividend should be viewed as a positive that the balance sheet can cover the extra debt.”
