WH Smith books Â£49m from deal to exit America
Friday 19 September 2003
WH Smith, the books and newsagents group, moved a major step closer to sorting out its woes yesterday, announcing it would exit the United States market after 16 years by selling its loss-making chain of shops in hotels and airports.
The UK company said it would net $78.5m (£49m) from the disposals, sending its shares up 8p to 365.5p. WH Smith has been under pressure to sell the business for some time, clearing the way for its incoming chief executive , Kate Swann, to focus on boosting profitability and sales in the competitive UK newsagents market.
The company issued a profit warning three weeks ago as its domestic business was hit by cut-price music sales and a heatwave that kept shoppers at home. WH Smith's operations in the US proved to be a drain on the overall group after the 11 September 2001.
WH Smith said the deal would be significantly earnings enhancing. While it will take a £7m charge to close its US head office in Atlanta by February, that facility cost £20m a year to run.
The company's US hotel retail division has been acquired by its former management for £8m. The total consideration for the 280 stores, located in hotels in the US and the Caribbean, will be paid via an interest bearing loan carrying a 5 per cent coupon. WH Smith will hold a 15 per cent stake in the company acquiring the assets, which it is also lending £4m.
WH Smith sold its 180 stores located in 23 US airports to the Hudson Group for £41m, of which £25m is to be settled in cash. The stores generated sales of £133m in the year to 31 August 2002.
- 1 Marijuana use by teenagers does not result in a lower IQ or worse exam results, study finds
- 2 Watch what happened when food critics were unknowingly served McDonald's
- 3 Jimmy Carr's controversial Oscar Pistorius joke goes too far at the Q Awards
- 4 Australian café owner sparks debate after saying 'No' to having unruly children on premises
- 5 NHS staff banned from drinking tea or coffee on the job because it looks like they're not working hard enough
Renee Zellweger on plastic surgery: 'I'm living a more fulfilling life and I'm thrilled that perhaps it shows'
Kim Jong-un 'purge': Six North Korea officials missing for weeks 'may have been executed'
Diwali: What is the festival of lights – and how is it celebrated around the world?
Nathan Cirillo: Final pictures emerge of soldier moments before he was shot dead by Ottowa gunman
Jimmy Carr's controversial Oscar Pistorius joke goes too far at the Q Awards
Of course, teenage girls need role models – but not like beauty vlogger Zoella
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Support for EU membership 'at highest level since 1991' with most Brits wanting to stay 'in'
Thousands with degenerative conditions classified as 'fit to work in future' – despite no possibility of improvement
Residents should throw a street party and mix with immigrant neighbours, councils told
Russell Brand threatened with arrest after filming outside Fox News headquarters
iJobs Money & Business
£350 - £360 per day: Ashdown Group: SQL Developer with T-SQL, Watford, Hertfor...
120-150k: Accountancy Action: We are looking for an experienced CFO from a min...
£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...
£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...