WHSmiths’ sale moves closer, Boots sold for £7.7bn, Poundland may be next
As the WHSmith sale inches closer to a conclusion, the greeting card industry could also be affected by deals involving two other High Street names.
The owner of Boots, which has a personalised photo card offer as well as a large Christmas card presence, is understood to have struck a £7.7billion ($10bn) deal to sell the business to US private equity firm Sycamore Partners in an agreement that will see the parent company Walgreens Boots Alliance (WBA) go private.
Retail Gazette reports the transaction should be completed by the end of this year, but that it raises questions about the future of Boots’ almost 2,000 stores across the UK which focus primarily on beauty and pharmacy, but with a significant seasonal toy and gift section, including wrap and cards.
The takeover injects a level of uncertainty into Boots’ future, particularly after WBA’s recent restructuring efforts, which saw 300 UK stores closed as part of a broader cost-cutting initiative.
In addition, Poundland’s owner Pepco Group is thought to be exploring the sale of the discount chain, where cards and giftbags are sold for £1, as part of a broader strategic shift.
The Retail Bulletin reported that, in a Capital Markets investor presentation, Pepco Group is looking to move away from FMCG (fast-moving consumer goods) to operate under a single Pepco format, oriented around its higher margin own-brand clothing and general merchandise ranges, so is evaluation all options to separate Poundland from the group in FY25, including a potential sale.
Meanwhile, it appears two bidders remain for WHSmith’s High Street arm with Sky News saying Bensons For Beds owner Alteri, and Hobbycraft owner Modella are still in talks, after Doug Putman, who owns HMV, apparently dropped out having stopped discussions with bankers Greenhill – but the Canadian billionaire could still make a new offer before the auction of the 233-year-old retailer concludes.
Either Alteri or Modella are expected to conduct a major review of WHSmith’s High Street business if they are successful, and Sky speculated the deal could be announced at the time of the company’s interim results in April. The 21 weeks to 25 January saw revenue decline by 3%. at the division which offers stationery, greeting cards, giftwrap, books and convenience products.
The WHS brand is not expected to be included in any deal, meaning it will disappear from Britain’s High Streets after the retailer placed the division up for sale last month to focus on its travel arm which represents 85% of its total profits.
