WH Smith PLC has agreed to acquire U.S. travel retailer Marshall Retail Group for $400 million on a cash and debt-free basis. Completion of the transaction is expected in the first quarter of 2020. The purchase will broadly double the size of WH Smith’s International Travel business.
The transaction comes a year after WH Smith acquired InMotion for $198 million, through which it gained a foothold in the U.S. market.
MRG currently operates 170 stores in North America, 59 of which are in airports. In 2019, the airports channel is expected to contribute $84 million to MRG’s total revenue, WH Smith says. Looking ahead, MRG has had a series of successful tenders, and a further 33 new airport stores are expected to open by the end of 2024. MRG is expected to add approximately 43,000 square feet of airport retail selling space, representing an increase of more than 75 percent from its current airport footprint of approximately 54,000 square feet, WH Smith says.
WH Smith says it anticipates a “clear integration plan with existing strong MRG management team incentivized to drive growth.”
“MRG is a highly successful U.S. travel retailer with a fast-growing airport business,” says Carl Cowling, CEO of WH Smith. “This acquisition will accelerate the growth of our International Travel business and, combined with InMotion, the market leading digital accessories airport retailer that we acquired last year, will significantly enhance our scale and growth opportunities in the U.S., a large and fast-growing travel retail market.”
Michael Wilkins, CEO of Marshall Retail Group, called the agreement an “incredible milestone for our business and is testament to the outstanding team at MRG. We are proud of our success, particularly our recent growth in airports, and I’m especially excited about the potential this unlocks for MRG in the years to come,” he said.
WH Smith said that MRG’s expertise in large, multi-brand and multi-category store concepts, alongside its differentiated ability to develop localized store concepts that create a strong “sense of place… means that it is well positioned to continue to expand in the growing US airport travel retail market.” The company notes that the addition of WH Smith’s expertise in airport essentials and InMotion’s market leadership in tech accessories is expected to further support these growth prospects.
Alongside its airport stores, MRG operates retail stores in resorts and tourist locations, primarily in Las Vegas.