TG Jones has secured High Court approval for a restructuring plan that could close up to 150 stores and impose substantial rent reductions across much of its remaining estate. The retailer, formerly WH Smith’s high street business, said the plan was necessary to avoid insolvency and continue operating.
Modella Capital acquired the business last year before rebranding its stores as TG Jones. The chain currently operates 451 locations and employs about 4,700 people, while WH Smith retained its travel stores and the rights to its historic name.
Lawyers told the court that TG Jones was facing a cash shortfall of almost £8 million by the end of the week without approval. Tom Smith KC, representing the retailer, described the company as “highly distressed” and “running on fumes.”
Store Closures and Rent Cuts Form Part of Rescue Plan
The restructuring is expected to leave TG Jones with about 302 stores, although the final number will depend on how many landlords choose to end their leases. Around 120 landlords could receive no rent for up to three years, while hundreds of other stores face reductions of between 15% and 75%.
Modella said savings from the restructuring would help fund improvements to the surviving stores. The company had already provided a £10 million loan and deferred liabilities, including a large tax payment, to keep the business operating before the court hearing.
The owner blamed underinvestment by the previous business, declining sales and difficult retail conditions. It also said the loss of the WH Smith name affected customer recognition after the acquisition.
Judge Calls Plan the Lesser of Two Evils
Some creditors opposed the proposal, with property company British Land previously calling it “fundamentally unfair.” Modella later offered concessions that led British Land to withdraw its opposition, although suppliers and other landlords are still expected to absorb significant losses.
Mr Justice Hildyard described the restructuring as “complex in its terms and far-reaching in its effect.” He said he was particularly concerned about the impact on landlords but concluded that the plan was the “lesser of two evils” compared with administration.
TG Jones chief executive Alex Willson welcomed the decision, saying it would allow the company to proceed with its turnaround. He said the plan would protect the main part of the store network and create a stronger and more sustainable business.
Featured image credits: Wikimedia Commons
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