Yahoo Finance WHSmith snaps up second US retailer in 12 months for 400 million dollars
WHSmith has continued its march into the US by snapping up North American retailer Marshall Retail for 400 million US dollars (£312 million).
Bosses said they had first started watching the business around four years ago when they made an active decision to pursue the 3.2 billion dollar (£2.5 billion) US travel market.
The previous owner of Marshall launched a sales process over the summer as WHSmith came out on top.
It means the retailer now has a further 170 stores in North America, including 59 in airports, with the remaining in busy tourist hotspots including Las Vegas.
Incoming chief executive Carl Cowling, who starts the new job in November, said: “We’ve known the business for about four years. We’ve been watching the market for years trying to think of the best ways to break in.”
The deal comes a year after WHSmith bought travel accessories business InMotion for £155 million.
Outgoing chief executive Stephen Clarke said the InMotion integration is ahead of schedule and that the company recently won its first tender for a US airport to open a WHSmith-style store – although he said the branding would be different and in keeping with the airport owner’s demands.
He said: “This win shows our strategy of working with airports remains successful and that airports trust us and our strategy. Although this won’t be a WHSmith store, I believe you will see a WHSmith store in a US airport at some point.”
The news came as the retailer revealed that sales jumped 11% across the business to £1.4 billion.
The travel division grew 22% to £817 million – primarily due to the purchase of InMotion – or up 3% on a like-for-like basis. Trading profits in the division jumped £117 million.
On the high street, where WHSmith has 576 stores, sales fell 2% to £580 million and profits were flat at £60 million, although Mr Clarke pointed out: “Profits were flat last year and you won’t find many retailers who’ll say that.”
Pre-tax profits for the group in the year to August 31 were up 1% to £135 million.
Travel is the biggest driver for WHSmith and now accounts for two-thirds of profits for the business.
Hospital stores performed particularly well, with sales up 12% – although WHSmith has faced criticism in the past for high prices on those sites and poor choices of healthy food. However, bosses insist those issues have now been resolved.
Airport revenue was up 5% and in rail it grew 1%, with bosses keen to roll out bigger stores at railway stations following a successful trial at Paddington.
