UK. WH Smith has announced the demerger of the WH Smith Retail business from the existing WH Smith Group, effectively splitting the group in two. The move will create two new holding companies, Smiths News PLC and New WH Smith PLC.
WH Smith shareholders will receive one Smiths News Share and one New WH Smith Share for each WH Smith Share, the company said.
Kate Swann and Alan Stewart are to be Group Chief Executive and Group Finance Director, respectively, of New WH Smith, the new retail company. All other members of the existing WH Smith Board become non-executive directors of New WH Smith.
The demerger is expected to become effective on 31 August.
Swann arrived to the struggling WH Smith in November 2003, but has cut costs vigorously and developed new formats for the business, including the successful travel retail division, which operates at airports and rail stations. She announced her intention to split the group after the group’s interim results in April.
Since 2003 the group has also sold off non-core assets such as the Asia Pacific retail operations and US airports and hotels business. With news and distribution remaining, the group said there was no “continuing strategic logic” for them to remain part of the same group.
In a statement today, WH Smith said that its businesses have continued to trade satisfactorily since April. It highlighted the performance of travel retail, which “has continued to build on good first half trading results,” said the group. The board was confident about prospects for its full-year results.
The new group will increase its focus on travel retail, said Swann to analysts after the announcement. “Travel hasn’t had as much focus as perhaps it should have,” she said. “It’s delivered extremely good results for the last three years and we foresee that continuing.”
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