Today’s news in brief-28/1/25

HMV owner Doug Putman is reportedly exploring a bid for WH Smith’s high street arm after the retailer announced plans to sell its 500-store chain. Modella Capital, owner of Hobbycraft, is also in talks regarding a potential acquisition, although the outcome remains unclear. WH Smith’s move comes as its high street profits dropped 9% to £39m last year, while its travel business now accounts for 75% of revenue and 85% of profits. The retailer has appointed Greenhill bankers to oversee the sale process, with a deal expected in the coming months.

Shop price deflation reached 0.7% in January, boosted by extensive sales as retailers sought to attract post-Christmas shoppers. Non-food deflation slowed to -1.8%, while food inflation eased to 1.6%, marking its lowest level since late 2021. Fresh food inflation dropped to 0.9%, with ambient food prices rising by 2.5%. Retailers face increasing pressure from new costs expected to add £7bn in expenses, which could drive up prices later this year.

Halfords has upgraded its FY25 profit forecast to £32-37m, citing strong sales growth in its retail and motoring segments. Cycling performed particularly well over Christmas, with sales up 13.1% in December, while motoring products grew 5.5% in January. Despite the positive outlook, the retailer warned of a £23m rise in labour costs for FY26 due to upcoming regulatory changes.

Pets at Home maintained its full-year profit guidance despite a 0.2% decline in Q3 group revenue to £361.6m. Its vet business saw strong growth, with revenue up 21.3%, offsetting weaker performance in retail, where sales dropped 2.4%. The retailer’s digital sales and subscription growth continued to build momentum, with plans to complete its network optimisation by the year’s end.

Wickes upgraded its profit guidance for FY24 to the upper end of £39.7-44m following a 3% rise in H2 retail revenues. TradePro sales surged 14%, while demand for interior paint and garden projects boosted growth. DIY sales showed moderate decline, but store expansions and refits helped maintain momentum. Wickes said it remains well-positioned to outperform the market through its strategic initiatives.