The first two singles I bought were Buffalo Gals by Malcom Mclaren and the Supreme Team (pictured), and Phil Collins’ cover of The Supremes classic, You Can’t Hurry Love. The year was 1982 and the place was my local branch of WHSmith in Chichester.

I can remember the record area well: it was at the back of the shop, past the papers and stationery, and I can also recall my nervousness at being judged for my choices by the ‘cool guys’ working behind the counter.

Two weeks ago WHSmith announced it was leaving the High Street. It’s remaining stores are being sold to Modella Capital, “a specialist retail and consumer investment boutique”, and ‘Smith’ will morph into ‘Jones’ as the branches are renamed TGJones.

This marks a pivotal moment in the company’s strategy as it finally cuts its ties with its origins. The first Smith’s store was opened by Henry Walton Smith and his wife Anna in Little Grosvenor Street in 1792.

Over the years the company has had to confront the changing face of the High Street. The specialist music stores such as Our Price, for example, have come and gone as their entire business models thrived and then faded, but WHSmith has continued.

One might be tempted therefore to characterise the business’s departure from the High Street as an admission of defeat, but I would argue instead that it is testament to the company’s ability to adapt as others have failed to do so.

The numbers explain the decision… In 2024 the company’s revenues from the High Street were £452 million, compared to £1,433 million from their Travel business. The headline trading profits were £32 million and £189 million respectively. High Street revenues fell 4%, Travel grew by 12%.

The repositioning of the group towards its higher margin, higher growth business therefore makes strategic sense.

To be clear, whether this makes WHSmith a good or bad investment is not a judgment I am qualified to make. But the pivot away from the High Street provides a good example of the way in which businesses can, and need to adapt, in order to survive.

Another example that comes to mind is Whitbread, which quit brewing in 2000, 258 years after its foundation, to focus on its hospitality operations.

Not every business is confronted with the existential threat posed by changes as profound as those affecting the High Street, but the success of WHSmith shows how being able to pivot strategically can ensure a company’s longevity.

There are lessons here for both business owners and fund managers around both being flexible and adaptive to change, and also taking a long-term approach to judging both a company and its management.

In the case of the latter, too many management teams become preoccupied with the short-term performance of their share price – not least because of the way their own financial incentives are structured – rather than the long-term success of the business.

Good fund managers will know how to spot and avoid such businesses.