The interim results announcement from WH Smith yesterday gives us a peak into their Australian strategy. I includes this:
Our international units are performing well and we have invested in additional resources to develop the business and support further growth. We have now won 156 units in international locations including 15 new units announced today: in the International terminal at Bali; Pudong Airport, Shanghai; further stores in Russia; and additional Fresh Plus hospital cafés in Australia. Additionally, we acquired a small cards and gifts franchisor in Australia in January 2014, Wild Cards and Gifts, which has 40 franchisees, enabling us to offer an additional brand to landlords and to develop further our international wholesaling.
To me, this reads like the Wild acquisition is a landlord play – getting a retail real estate footprint in Australia, facilitating their wholesaling operation. The wholesaling comment is interesting since WH Smith hived off its wholesaling division into a separate public company eight or so years ago.
On Wild, if I am reading the financials on page 5 right, the acquisition earnout cost to WH Smith was £2m.