By Yamini Kalia

(Reuters) -WH Smith is to sell its more than 230-year-old British high street business to Hobbycraft-owner Modella Capital for 76 million pounds ($98 million) to focus on global travel retail.

WH Smith's profitable travel business, which has about 1,200 stores in airports and train stations across 32 countries, has benefited from customers splurging on treats, books and electronics.

"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," CEO Carl Cowling said in a statement.

The group's nearly 500 high street stores will be renamed TGJones by the new owner, which intends to retain existing products and services, including the Post Office and Toys “R” Us, while gradually adding new product ranges.

"Modella Capital believes strongly in the future of the high street, and we are delighted to have the opportunity to take a heritage brand and develop it further in the coming years," a Modella spokesperson said.

The British retailer's shares fell 1.7% to 1,071 pence by 0925 GMT.

WH Smith's travel business contributed 75% of the group's revenue and 85% of its trading profit in 2024.

The retailer's UK business has had to cope with the country's inflation-ridden, subdued consumer market and revenue fell 6% in the 21-week period to the end of January. In contrast, revenue at its travel business rose 7% over the same period.

WH Smith had said in January it was looking at potential strategic options for the business, and later media reports said Modella Capital, which owns retailers including Hobbycraft and Create & Craft, was one of the final bidders.

($1 = 0.7729 pounds)

(Reporting by Yamini Kalia in Bengaluru. Editing by Mrigank Dhaniwala and Jane Merriman)