Iconic stationery retailer WHSmith dropped a bombshell at the end of January when it announced it was looking to offload its High Street division – comprising around 500 town centre stores located throughout the UK.
A number of closures had already been confirmed at the start of this year, broadly in line with recent downsizing trends, but the news that the company was “exploring potential strategic options” for the whole network came out of the blue.
Perhaps it shouldn’t have been that much of a surprise. For the past few years, WHSmith has been describing itself as “the global travel retailer” and its focus has clearly been on developing its Travel division. In fact, Travel has more than 1,200 stores in 32 countries and accounts for three-quarters of the group’s revenue and 85% of its trading profit.
Meanwhile, High Street has been something of a poor relation, essentially viewed as a ‘cash cow’ to fund investments in its sister division. As Chair Annette Court wrote in the plc’s 2024 annual report: “In our UK High Street business, we have a successful strategy focusing on costs, increasing margins and generating cash. Our aim is to ensure the profit and cash flow of this business remain robust and sustainable.”
Perfect storm
What this has meant is a general lack of investment across the UK high street outlets, and Workplace360 readers will no doubt agree the shopping experience often leaves a lot to be desired.
That’s a shame for a business which was once a stationery powerhouse. Just five years ago, the category accounted for half of High Street’s revenue of £580 million and around 60% of store trading profits of £60 million. At the time, WHSmith said stationery was still “an important area of investment” and the market remained “robust”.
Now, the 500 shops are facing an uncertain future. Private equity firms Hilco and Alteri as well as Hobbycraft owner Modella Capital are among those reportedly showing interest, but there have been suggestions that, even if a deal is reached, about half the locations could close.
It’s potentially another blow for a UK retail sector already blitzed by a raft of closures over the past few years. In 2024, more than 13,500 shops closed down, according to the Centre for Retail Research.
Independent retailers association BIRA said it was “alarmed” by the WHSmith news, which came after “a stream of other negative announcements”.
“Job losses at Sainsbury’s and Morrisons, combined with another wave of bank closures, creates a perfect storm for many high streets across the UK,” stated BIRA CEO Andrew Goodacre.
Nemo Office Club has a strong retail presence among its dealer members. Managing Director Tim Beaumont tells W360 there is no hiding from the fact the recent developments at WHSmith highlight the issues facing the UK high street.
“It reflects broader shifts in consumer behaviour, increased operating costs and the ongoing pressure of competition from online,” he notes.
Beaumont adds: “The National Insurance rate hike presents another challenge, increasing employment costs at a time when retailers are already navigating rising business rates, inflation and supplier price pressures.”
These challenges, as they relate to the office and stationery segments, are clear for all to see in the figures from The BOSS Federation. According to the latest BOSS/GfK Panelmarket report, which covers 36 categories, sales in January 2025 fell by 3.4% year on year.
Ongoing resilience
While there was a positive result among larger retailers such as mass merchandisers and DIY superstores, sales in specialist stores dropped by more than 9%. This was on the back of a decline of almost 6% last year.
Nevertheless, Beaumont points to the resilience of Nemo Office Club’s members despite the ongoing economic headwinds: “Their entrepreneurship never ceases to impress and, while footfall has fluctuated, many have adapted by refining their product mix and enhancing customer service. Some have reported growth in niche areas like sustainable stationery, premium stationery items and gifting.”
The group is working with members to help them develop their digital capabilities, but Beaumont argues they need to differentiate themselves from a typical webstore solution.
“Retail shops have a unique advantage in terms of holding stock on their shelves and having a visible presence where anyone can walk in for an instant purchase or to collect pre-ordered items,” he notes.
Beaumont says it is no coincidence the group’s monthly retail team meetings are currently attracting record attendances as more members want to share and discuss ideas for increasing footfall. He explains: “These brainstorming sessions are a great way for us to identify different ways that we, as a group, can support them through the challenges, be that adapting our Keep It Local message, exploring new product ranges, improving the customer experience with in-store events or workshops and conducting unique eye-catching promotions.”
Keep It Local is a wider, ongoing campaign to spread the message about the benefits of going into town centres and spending at local shops. Beaumont recognises the initiative requires “constant refreshing” in order to maintain its impact. Recently, for example, the group has contacted the local MP for every member, resulting in several visits to stores.
While this has had a positive impact, Nemo Office Club is looking at other ways to drive footfall. These include opportunities to diversify into supplying local businesses on account.
Although this is a different business model that requires a certain level of outreach some retailers may find daunting, Beaumont says they should leverage local networks. “Many of our retailers have always been community driven and involved in local social media groups or breakfast clubs. Therefore, it is really about getting the offering and the messaging right to approach these people, which is something we are helping our members with.”
Despite the challenges, Beaumont remains optimistic about the future of independent retailers. He believes their agility, community focus and ability to offer specialised expertise set them apart from larger chains.
He concludes: “While the retail landscape is evolving, those that continue to innovate, embrace digital transformation and build strong local relationships still very much have a viable and sustainable future.”
