The planned sale of WH Smith’s high street stores could turn some communities into “postal deserts” because 200 post offices are operated in the retailer’s shops, a union has warned.
“These potential closures are devastating, but they are sadly all too predictable,” the Communication Workers Union said.
“For far too long, certain communities are being turned into postal deserts, and bad economic decisions are eroding high streets up and down the country.
“Just like the Horizon scandal, Post Office staff are being put at the bottom of the pecking order – these workers and the communities they serve deserve an end to this instability.”
The comments come as bosses from the UK-listed retailer WH Smith – which sells a wide array of products including magazines, books, stationery, toys, cards and confectionery – consider the potential £100m sale of the entire 500-store high street chain in order to focus on the expansion of its outlets in travel locations, such as train stations and airports, in the UK and internationally.
It is understood that changes introduced in the budget, including an increase in employers’ national insurance contributions, did not play a part in the decision to sell the high street business.
However, falling shopper numbers and rising costs, including on wages and business rates, have weighed on all high street retailers in recent years, eroding their profitability.
Interested parties for the 233-year-old chain are thought to include the financial investors Alteri, the owner of Bensons for Beds, Hilco, the former owner of HMV and Homebase – both of which fell into administration – and Modella Capital, the owner of Hobbycraft, as first reported by Sky News.
While no retail groups have yet entered talks, names such as Doug Putman, the owner of HMV; Mike Ashley’s Frasers Group, which owns House of Fraser, Sports Direct and the online department store Studio Retail; as well as CDS, the owner of The Range, which recently bought the Wilko and Homebase brand names and some stores, are expected to examine the company.
Putman, who recently lost out on buying the collapsed Wilko chain, said he could not comment on whether he was looking at WH Smith but examined lots of potential acquisitions. He added: “WH Smith is a fantastic brand.”
Any deal could result in the disappearance of the WH Smith name from UK high streets, with a potential buyer not expected to keep the rights to the name long term. Store closures are also on the cards, with potentially up to 5,000 retail jobs at risk.
The British Independent Retailers Association said the sale could “create yet another serious gap in essential high street services for local communities” because of the potential knock-on impact on the post office services.
There is only one location – West Wickham – where WH Smith operates the only post office in town, according to analysts at the Local Data Company. However, the retailer has mostly taken over the larger crown post offices, which can offer a larger array of services than small independent post offices.
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A WH Smith spokesperson said: “WH Smith is proud of its partnership with the Post Office, which has delivered benefits for the customers of both organisations since 2006 and currently operates in around 200 WH Smith stores.
“Our Post Office partnership is an important part of our high street business and will continue should a sale of our high street business to new owners proceed.”
Analysts said WH Smith was not selling off its high street business in order to raise cash but to simplify its business and focus resources on its fast-growing travel arm in order to make itself more appealing to investors.
Its successful travel stores, of which there are now almost 1,300 in 32 countries, including outlets in hospitals, generate more than three-quarters of the group’s revenue of about £1.9bn in the year to 31 August 2024 and 85% of its trading profit.
“The headwinds in UK retail are well known and the list of interested parties is likely short. The logic is clear but with most investors already applying a low value to high street, the news probably will not move the dial much,” analysts at Peel Hunt said.
