British retailer WH Smith Plc said on Thursday it will buy Marshall Retail Group for about $400 million (€361 million), betting that the American peer's network of stores at US airports will help boost profits soured by turmoil on the British high street.
Business at WH Smith's stores at airports and railway stations has been booming as the over 200-year-old company benefits from rising passenger footfall and new larger-format outlets.
US Move
The company, which sells everything from books and sandwiches to Bluetooth headphones, began its push into the United States last year when it bought digital accessories retailer InMotion.
WH Smith said it would fund the all-cash deal for Marshall through a combination of £200 million (€230 million) in new debt and a £155 million equity raise. The company will suspend its share buyback programme while it pays off debt.
The reliance on travelling consumers was highlighted on Thursday when WH Smith reported a 7% rise in headline annual pre-tax profit, boosted by a 14% jump in earnings from its travel business.
Headline profit before tax rose to £155 million from £145 million in the year ended Aug. 31, marginally beating analyst estimates of £154.2 million, according to IBES data from Refinitiv.
The company also said it was prepared for Brexit and has put in place contingency plans, including increasing the stock of convenience products.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
