WH Smith: Can a rebrand save it?

"A change of ownership is unlikely to turn things around," Kaylie Pferten says of WH Smith's high-street stores

A new advertising campaign, some sleeker-looking stores, an updated stock range, or even some new carpets might have helped. One of the oldest tricks in the corporate playbook has been chosen by the new owner of WH Smith, one of the oldest retailers on the British high street. The name is changing. TG Jones will be the new name for WH Smith. The issue is that it is difficult to see that having a significant impact.

Modela Capital, a retail investment firm, is purchasing WH Smith's 480 high street stores for 76 million dollars. The company will then only concentrate on its travel division, which operates in train stations and airports worldwide. Although it seems like a tacit admission that the only way to make money in Britain is for people to leave the country, the reasoning behind it is difficult to argue with.

WH Smith intends to concentrate on what functions.

While the high-street stores have been fighting to stay profitable, the travel industry has been growing quickly, selling books, snacks, and last-minute water bottles in the departure lounge. Without the British high street's albatross, WH Smith will have more time to concentrate on the more beneficial aspects of the company and eliminate the frequently run-down stores in market towns and provincial areas that sell a strange assortment of snacks, stationery, and books. It had to take action because its share price had dropped by 20% in the previous 12 months.

It's difficult to understand how it makes sense for the remaining stores or the customers. Perhaps the only name as boring as "Smith" is the one that the marketing consultants are proud of now. It is difficult to avoid the sense that the high-street industry will eventually disappear, joining the likes of Dixons and Woolworths as companies that have long since disappeared from the main shopping grounds.

Three major issues exist. First of all, WH Smith was already deteriorating. Those over fifty may have fond recollections of the time when it served as a provincial high street entryway to the outside world. Back when vinyl was still in use, it sold music in addition to a vast array of books and magazines. Before the internet, it was frequently the only source of information about events occurring in other places. Similarly, you could choose a new pencil case from its stationery before classes resumed for the year.

Nevertheless, the market has moved on, regardless of sentiment. The number of newspapers and magazines has been rapidly decreasing. Because of the Kindle, the book industry has completely changed. Physical books are still purchased by many, but Waterstones has grown and now offers a much better selection than Smiths. Although stationery is still necessary, it can be purchased in many locations. Smiths' continued existence is surprising in many ways, considering how drastically the market has evolved over the past 20 years.

TG who?

Second, customers will become confused by the brand change. Because its brand is still so well-known, Smiths has survived the decline in its core market. On the other hand, TG Jones won't have any brand. Nobody has ever heard of it, and since it doesn't offer a particularly interesting selection of goods, they won't be particularly curious to learn more about its purpose.

It will also divert management's attention from enhancing the stores. Given all of the obstacles Smiths had to overcome, success was always going to be difficult. But in comparable markets, rivals like Waterstones, The Works, and Card Factory have performed noticeably better. The high-street stores were neglected by the previous management, who were much more focused on the travel division. The goal of the new group will be to build an entirely new brand. They don't seem to have the time or resources for anything else. The chain was largely sustained by the brand's legacy. It may not be around for very long, and the harsh reality is that TG Jones will struggle even more than WH Smith did.