WHSmith Puts Retail Eggs In One Basket With Sale Of Greetings Card Unit

WHSmith store at Adolfo Suárez Madrid-Barajas Airport Terminal 4 in Spain. (Photo by Xavi Lopez/SOPA Images/LightRocket via Getty Images)

SOPA Images/LightRocket via Getty Images

British retailer WHSmith will become a pure-play travel retailer following the sale of its online personalized greeting cards business, FunkyPigeon.com. The £24 million ($31.8 million) divestment to Card Factory—a listed gift and card business with more than 1,000 stores in the U.K. and Ireland—is expected to be completed by the end of the year.

WHSmith’s move towards the airport and travel channel has been in the works for some years, but was crystallized in March 2025 when the company announced the sale of its entire U.K. High Street business to Modella Capital. The deal, covering almost 500 stores, went through at a significant discount to the original asking price, with WHSmith expecting gross cash proceeds of up to £40 million ($53 million) by next year.

At the time of the announcement, investors took flight with the stock dropping below $10 for the first time in more than a decade, followed by a recovery. The FunkyPigeon.com sale notice on Tuesday led to another decline, taking the stock to £10.28 by today’s close. Year-to-date, the stock is down by 13.5%.

It was a very different story for Card Factory, whose stock has soared by 10% since Tuesday’s opening. The acquisition looks like a good one: over the prior two financial years, Funky Pigeon averaged £32 million in revenue per annum, generating £5 million EBITDA. This is a respectable margin for an online retail business and is likely to provide strong returns for shareholders.

The deal also accelerates Card Factory’s existing digital strategy by providing a new platform for online growth. By combining its existing omnichannel offer with Funky Pigeon’s, the company can leverage its 24 million unique store customers and become a bigger presence in the U.K. online card/gift retailer, where Moonpig, listed in London since 2021, is dominant, and Hallmark UK and Thortful are also major players.

Card Factory’s CEO, Darcy Willson-Rymer, said that a unified technology platform—based on Funky Pigeon’s existing one—“will provide the data needed to develop deeper insights into the customer journey.”

WHSmith gambles on a pure-play strategy

Meanwhile, WHSmith, which owns InMotion, still needs to convince investors that its pure-play global travel retailer strategy can be a winner. Having ditched its U.K. High Street business—which was profitable and cash generative—it must show that the travel retail channel has solid prospects.

In the financial year ended 31 August 2024, 75% of the group’s revenue and 85% of its trading profit came from its travel business, while the U.K. domestic unit had become an increasingly smaller part of the group.

Over the past decade, WHSmith has become a key global travel retailer with over 1,200 stores across 32 countries, but it is not yet among the biggest 10 players when looking at the entire duty-free and travel retail channel. The company has successfully developed its ‘travel essentials’ proposition, including a higher proportion of food and drink, and health and beauty.

The company has also won new and/or expanded contracts at London Heathrow and at New York’s John F. Kennedy Airport. Currently operating two stores in Terminal 5, WHSmith will open a further eight in the New Terminal One when it is inaugurated in 2026. This will include the first WHSmith-branded store at the hub, along with some bespoke concepts such as The Queens Borough Market and The Canopy.

The North America division has been expanding at major U.S. East Coast airports, operating over 50 stores in gateways such as Newark and La Guardia serving New York, and Ronald Reagan and Dulles International airports in Washington. In total, the division has more than 300 stores across North America, the world’s largest travel market by far.

North American focus

WHSmith CEO Carl Cowling has said that “North America is our most exciting opportunity for growth,” so expect the company to compete aggressively for new concessions as they come up.

However, WHSmith faces strong competition from more powerful airport retailers such as Avolta and Lagardère Travel Retail, which are actively pursuing the travel-essentials segment, the latter in particular. They have both developed hybrid retail to stand out, while Gebr. Heinemann has also been testing out related concepts at smaller airports.

WHSmith believes its concepts are strong enough to hold their own. Now that its management is unencumbered by other businesses, it says it is “well positioned to capture the substantial global growth opportunities” in key travel markets, not least because air passenger numbers are forecast to more than double between 2024 and 2050.