More than 120 TG Jones high street stores are facing potential closure following court approval for a significant restructuring. The landlords of the former WH Smith stores, now under TG Jones, are being requested to agree to a rent-free period for the next three years as part of cost-cutting measures to avoid insolvency.
During a High Court hearing, lawyers representing TG Jones emphasized the urgent need for the approved plans, citing an £8 million weekly deficit if not implemented. The company, now owned by Modella Capital, has secured an additional £15 million loan, in addition to a previous £10 million loan, and negotiated reduced rental rates with landlords.
In a recent court session, Mr. Justice Hildyard acknowledged the complexity and impact of the approved plans, expressing difficulty in reaching a decision but ultimately granting his approval. The chain, formerly known as WH Smith, was rebranded to TG Jones following its acquisition by Modella, while the original WH Smith business retained stores in travel-oriented locations.
TG Jones operates approximately 450 stores with a workforce of 4,700, primarily in the UK. Tom Smith KC, representing TG Jones, indicated that an estimated 150 stores may close as a result of the restructuring, giving landlords the option to terminate leases if they do not agree to reduced rental terms.
The company has faced challenges such as long-term sales decline, inflation, increased online shopping, reduced consumer spending, and higher operational costs. The transition from WH Smith to TG Jones has also impacted sales negatively. The historical background of WH Smith, established in 1792 and later split into separate entities, was highlighted during the court proceedings.
CEO of TG Jones, Alex Willson, expressed gratitude for the court’s approval of their Restructuring Plan, emphasizing its importance in enhancing the company’s sustainability and core business operations. The decision enables TG Jones to proceed with its turnaround strategy, with acknowledgement given to stakeholders and Modella Capital for their support throughout the restructuring process.