A significant number of former WH Smith high street stores, now operating under the name TG Jones, are at risk of closure as part of a restructuring plan proposed by Modella Capital. The plan, which could lead to the closure of up to 150 stores, poses a threat of substantial job losses for the 5,000 employees within the company.
Modella Capital, which acquired WH Smith’s high street business last year for £40 million, has faced challenges in growing the business due to tough trading conditions and escalating costs. The company’s decision to rebrand the stores as TG Jones has been cited as a factor deterring customers. As a result, the focus has shifted to the remaining WH Smith outlets located in travel hubs like airports, railway stations, and hospitals.
The high cost of refurbishing the stores, many of which have not been updated for years, has been highlighted as a contributing factor to the financial strain. Modella Capital is initiating negotiations with store landlords to determine the closure of stores, with the potential closure of up to 150 out of the 480 TG Jones stores pending the outcome of two High Court hearings scheduled for the following month.
The restructuring also jeopardizes the future of several Post Office branches housed within TG Jones stores. Modella Capital’s recent acquisition spree, including struggling retailers like Hobbycraft, the Original Factory Shop, and Claire’s Accessories, has faced challenges, with Hobbycraft up for sale and the latter two entering administration.
A spokesperson for TG Jones stated that a formal restructuring plan has been launched to ensure the company’s viability for the future, with Modella Capital committing over £35 million to support the process. Despite the company’s belief in its core business strength, challenging market conditions, increased operating costs, and the impact of the name change from WH Smith have led to financial struggles.
The company emphasized its commitment to preserving jobs where possible but acknowledged potential store closures and role reductions. Any decisions regarding closures or workforce adjustments will involve thorough consultation with employees and their representatives to mitigate the impact on affected individuals and communities.
