Modella Capital, the private‑equity firm that took over WHSmith last year, is betting on a wholesale remodel of the ageing high‑street chain. It plans to shutter up to 150 stores from the 480‑store portfolio and slash operating costs while pouring cash into the survivors. The move aims to reverse a years‑long revenue decline and prove that brick‑and‑mortar can still generate growth. Analysts view it as risky.

Roughly £100,000 will be spent to refurbish each retained shop, a sum that must be recouped within five years. That translates to a third‑plus boost in annual post‑tax cash flow per store, given WHSmith’s 2024 figures. Modella hopes to achieve this by adding postal and banking services and stocking Toys R Us and Hobbycraft items traditionally found in retail parks. The timeline aligns with shareholder expectations.

Industry precedent suggests the gamble can pay off; Mitchells & Butlers reported a £35 profit lift for every £100 invested in pub refurbishments. Similar tactics have revived Boots and Zara outlets, while discount retailer The Works saw shares jump two‑thirds after modest growth. If Modella’s plan lifts WHSmith’s earnings, other legacy high‑street brands may follow suit.