British retailer, WH Smith, announced yesterday that it has made the move to the US following its takeover of Inmotion.
The Swindon-based book, stationery and gift chain unveiled its plans for a £155m deal to double its travel business, as part of a strategic international shift.
After announcing that the store had spent “quite some time” considering the expansion, Steve Clarke, WH Smith’s chief executive, said that the takeover of Inmotion would provide a “really good route into the US”, allowing it to expand in airports across the country.
The takeover of Inmotion is set to add a further 114 outlets across the US to WH Smith’s 300-strong chain of international travel shops. The American business, is expected to deliver £130 million of revenues and an underlying profit of £18 million this year. In the 12 months to the end of August, WH Smith’s international travel division reported £132 million of sales and an £11 million trading profit.
Mr Clarke is hoping that he can also expand Inmotion beyond America.
Jonathan Pritchard, a stockbroker with Peel Hunt welcomed yesterdays announcement saying that Inmotion was a “very good business in its own right and, crucially, it opens a lot of doors.” He added: “The market historically has been sniffy about UK retailers going to the US, but strategically we think that this is a great deal.” Analysts at Barclays said that “concerns over the UK high street exposure should continue to subside as travel exposure becomes larger”.
WH Smith is borrowing £200 million to fund the acquisition and intends to continue its recently announced £50 million share buyback programme.