British retail faces a reckoning as 232-year-old chain looks to sell its high street stores

British retailer WH Smith is looking to sell its historic high street business to focus on its travel store unit in the latest hit to the U.K.’s retail industry.

The 232-year-old retailer said Monday that it was exploring the sale of more than 520 high street stores, which sell newspapers, books and stationery, confirming reports over the weekend that talks were underway.

“WHSmith confirms that it is exploring potential strategic options for this profitable and cash generative part of the Group, including a possible sale,” the company said in a statement on the London Stock Exchange website.

“There can be no certainty that any agreement will be reached, and further updates will be provided as and when appropriate,” it added.

WH Smith — part of the FTSE 250 — has been doubling down on its U.K. travel unit over recent years, with over 580 travel stores across airports, hospitals, railway stations and motorway service areas. Its wider global travel business totals 1,200 stores across 32 countries, which the company said now accounts for three-quarters of its group revenue and 85% of its trading profit.

Investec’s Kate Calvert said in a note Monday that the plans were “not a surprise” given the group’s investment in its travel operations. In emailed comments to CNBC, Calvert added that WH Smith investors should be buoyed by the move.

“You own WH Smith for the Travel business. Travel is an attractive long term structural growth market. If you dispose of High Street, you should get a higher valuation rating over time,” Calvert, head of retail and consumer research at Investec, told CNBC via email.

Shares of WH Smith climbed around 5.5% following the announcement Monday, having fallen nearly 11% in 2024. They were last trading 2.9% higher.

The move comes as pressure mounts on the U.K. high street retail industry amid the continued growth of e-commerce.

Domestic policy changes have added to costs for U.K. business, with the government in October announcing increases to the U.K.’s minimum hourly wage and the National Insurance (NI) payroll tax paid by employers.

High street supermarket chain Sainsbury’s announced on Thursday that it plans to cut  3,000 jobs in the U.K. It follows warnings earlier this month from major retailers who cautioned that they could be forced to cut thousands of jobs this year to cover the cost of higher taxes, according to a survey by the British Retail Consortium.

“The Retail sector has seen unprecedented opex [operational expenditure] inflation in recent years from National Minimum wage and rates increases,” Calvert said.

“Government increases in NMW & NI [national minimum wage and national insurance] are a huge headwind and very unhelpful. Retailers will need to close unprofitable stores,” she added.