Gadget Shop acquisition suggests online strategy shift at WHSmith

The deal, for an undisclosed sum, went through last week. Suppliers to The Entertainer were told the retailer wanted to focus solely on its core toy business.

Seymour Pierce analyst Kate Calvert said: “It appears as if this is the precursor to something larger and online. It’s hard to judge whether it’s a positive move until we have greater understanding of WHSmith’s strategy. It’s an unexpected move. I can see some logic to it.”

WHSmith would not disclose what it plans to do with the business but sources close to the retailer said it aimed to expand the Gadget Shop offer.

The bookseller and stationer already sells some Gadget Shop branded lines in its stores and is looking to build on this. It is understood WHSmith has acquired the name and associated assets, including trademarks, goodwill, URL and the database of customers. WHSmith will use its own warehouse facility, it is thought.

On the Gadgetshop.com website a message to customers reads: “Our website is currently unavailable while we relocate our warehouse. We apologise for any inconvenience and look forward to serving you again soon.”

The Entertainer declined to comment but, in a letter sent to suppliers and seen by Retail Week, Duncan Grant, the retailer’s director of multichannel, said the sale “forms part of our strategy to focus on our core Entertainer toy business and the proceeds of this sale will be reinvested in our new store opening programme.

“We have passed on all supplier contact details to WHSmith and they have instructed us that they will make contact with suppliers directly where appropriate.

“To be clear, this sale does not affect the ongoing operations of The Entertainer business.”

Deloitte handled the transfer of ownership. It is thought there were several expressions of interest.

The Entertainer bought the Gadget Shop brand after it collapsed into administration in 2005. It was then launched as on online only operation.