WH Smith has sold its 233-year old high street business to the owner of Hobbycraft in a £76m deal.

Sky News revealed in January how a sales process was under way for the arm, which employs roughly 5,000 people and has 480 stores.

Modella Capital won the final stage of the auction process in a run off against Alteri investors – both specialists in turning around troubled retailers.

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The deal will see the WH Smith name erased from town centres to become TGJones.

The sale allows the WH Smith business to focus fully on its lucrative travel retail arm.

That has around 1,200 stores, based mainly at airports and railway stations, in 32 countries globally and accounts for 85% of group profits.

Chief executive Carl Cowling said: “Given our rapid international growth, now is the right time for a new owner to take the High Street business forward and for the WH Smith leadership team to focus exclusively on our Travel business”.

There was no word on what the new owners may do to bolster profitability, with a question mark firmly hanging over employment and the store estate – often the subject of criticism over a perceived lack of investment.

WH Smith’s statement said: “All stores, colleagues, assets and liabilities of the High Street business will move under Modella Capital’s ownership as part of the Transaction.

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“Under this new ownership, the business will be led by Sean Toal, currently CEO of the High Street business. The High Street business will operate for a short transitional period under the WHSmith brand whilst the business rebrands as TGJones.”

The sale to Modella represents an enterprise value of £76m on a cash and debt-free basis but will see WH Smith secure an estimated £25m on a net basis after several costs associated with the sale are accounted for.

Shares fell by more than 1% at the open.

The chairman of P&O Ferries’ parent company DP World has told Sky News he went ahead with a £1bn investment in the UK despite feeling “discredited” by criticism from a cabinet minister.

P&O was widely criticised in 2022 when more than 700 seafarers were summarily fired and replaced by largely overseas workers without consultation.

Last October, the issue threatened DP World’s planned expansion of London Gateway, its deepwater port on the Thames Estuary, when the then transport secretary, Louise Haigh, described P&O as a “rogue operator”.

Her comments came as DP World was in the final stages of negotiating a £1bn investment in the port, due to be announced at the government’s investment summit.

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In response, DP World pulled the announcement and only relented following a personal intervention by the prime minister to keep his showpiece event on course.

Speaking exclusively to Sky News, Sultan Ahmed Bin Sulayem said the criticism was unexpected given the scale of his planned investment in the UK.

‘Water under the bridge’

“There was a misunderstanding. Someone, unfortunately, said something that was not what we expected.

“We were going to invest in infrastructure, a huge investment, and then we get the person in charge to basically discredit us. But it’s water under the bridge.”

Bin Sulayem confirmed that he had spoken with the prime minister and received “reassurances” that Ms Haigh was expressing a personal view. She subsequently resigned after admitting a fraud offence.

The chairman also defended P&O’s conduct, saying that having received no state support during the pandemic, the cuts were necessary to save the company.

“We had a choice. We either close down the company and 3,000 people or more lose their jobs, or we try to survive by letting 700 or so go. And we felt that was right,” he said.

“Maybe we didn’t follow the procedures, but most importantly, we compensated every employee with more than what the law said.”

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Rebuilding relations

Bin Sulayem was speaking on a flying visit to the UK intended to rebuild relations with the government, meeting investment minister Poppy Gustaffsen at London Gateway to discuss an expansion that will make the port Britain’s largest by volume and offering encouraging words about the UK’s attractiveness to investors.

“We believe in the UK economy, in its strength, and we believe the economic fundamentals are strong. That’s why we invested,” he said.

“The UK has the best stock market in the world. You have English law, and you have the best universities in Oxford and Cambridge. If we look to the future, it will be the economy of the brain, not the economy of the hand.

“The world economy doesn’t want labourers, it wants brains. People want engineers. They want free thinkers. They want innovators. That is what’s here, and that’s why we invested in London Gateway.”

Tariff trade trouble

With ports and logistics operations in more than 70 countries handling around 10% of global trade, DP World’s chairman has a unique insight into global trade and the likely impact of the tariff war sparked by Donald Trump.

While confident that trade will find a way to navigate the disruption, he warned America’s trading partners to take the president seriously.

“I think psychologically it will [have an impact], but in reality it will not, because trade is resilient. I think of it like water coming from the mountain in the rain, nobody can stop it. If you can’t sell a product in one place, you can sell it somewhere else.

“Trump is a deal maker. He is making threats because that’s the way he negotiates. He comes with impossible demands because he wants people to come to the table.

“But he’s serious. He will do what he’s threatening if nobody makes a deal.”

Payday banking outages will happen again but are unlikely to occur tomorrow, according to a banking technology expert.

Online banking failures on the final Friday of the last two months, payday for many, were seen as millions of customers of different institutions were locked out of accounts or unable to send or receive payments.

At the end of January, Barclays experienced problems in branches and online for days, while in February issues – which did not appear to be related – were encountered by Lloyds, Halifax, Nationwide, TSB, Bank of Scotland and First Direct.

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Similar outages “will absolutely happen again”, said Paul Taylor, chief executive of bank technology company Thought Machine, which sells cloud computing solutions to the banking industry.

Given the attention generated by the last two paydays, Mr Taylor said his guess is this Friday will be safe as every bank’s chief information officer is “super aware” of the day and that “it would be devastating for reputation if anything happened”.

The troubles, however, are not unique to the last two paydays but have just been more visible and complained about, Mr Taylor told Sky News.

“My guess is that we’re talking about visibility, not occurrence. I’m aware of bank problems on paydays for many years.”

Through his job, Mr Taylor said he speaks to a major bank every day and counts Lloyds Banking Group as a client.

Why are glitches happening?

These issues will continue to arise as lenders grapple with “creaking infrastructure”, Mr Taylor said.

“The sheer volume of payments can overwhelm the bank, and that’s why it’s particularly susceptible on this [pay] day”.

“The problem that banks have is that the systems are old and the systems are fragile”, he said.

“One problem causes a knock-on effect, and that knock-on effect ripples through the bank, and then the end result is on payday that the payments don’t get made”.

Solving the issue is expensive and time-consuming, he added, even for banks that have enjoyed higher profits in recent years, thanks to elevated interest rates.

Many banks are moving to more modern infrastructure, Mr Taylor said, but it takes time and banks don’t want to get it wrong.

But some are “so entrenched in this legacy technology”, he said.

The UK banks are “not that bad” when compared to international competition and each spend billions on IT every year, Mr Taylor caveated.

Despite this, no banks contacted by Sky News said glitches wouldn’t happen again.

What went wrong on paydays?

And when banks were asked what caused the glitches last payday, none responded with an explanation.

After parts of Barclays were down in January, the phenomenon began being investigated by the influential Treasury Committee of MPs.

As part of this, banks were asked to outline the outages they’ve experienced and why.

In the days before the February payday, nine top UK banks told the committee typical reasons for failures included problems with third-party suppliers, disruption caused by systems changes and internal software malfunctions.

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Those companies had a total of 803 hours of unplanned outages over the last two years, they said, equivalent to 33 days, comprised of 158 individual IT failures.

What have banks said?

TSB and Natwest referred Sky News to the banking lobby group UK Finance, which said it did not know what was behind the past two payday problems.

“The banking industry invests significantly in the resilience of systems and technology,” UK Finance’s managing director of operational resilience David Raw told Sky News.

“The ongoing investment means incidents which cause significant disruption happen very rarely,” he said

“Incidents can be short in duration, but if an issue does arise the bank will always work extremely hard to rectify it as quickly as possible and minimise the customer impact.”

Santander UK said it was not affected by the last two payday outages. “We have robust systems in place to ensure that our services remain operational for customers,” a spokesperson said.

“Since January 2023, our services have been available to customers for 99.9% of the time. When there is a disruption, our priority is to minimise its impact and restore services as quickly as possible and support customers through our alternative channels and ensure that no customer is left out of pocket as a result.”

A spokesperson for HSBC, which also owns First Direct, said: “We continue to invest in our operational resilience to provide the best possible service for our customers”.

“The end of each month brings increased transaction volumes and heightened demand across the banking services industry, and so we plan accordingly – enhancing system capacity as well as limiting non-essential, back-end system changes and updates.”

Nationwide, The Co-operative Bank, Lloyds – who also own the Halifax and Bank of Scotland brands – did not respond to Sky News’s request.

Barclays did not comment.