A significant restructuring at TG Jones high street stores is on the horizon, with over 120 locations potentially facing closure following court approval. Landlords of the former WH Smith stores have been requested to agree to a rent-free period of three years to cut costs and avoid insolvency.
TG Jones, represented by their legal team, informed a High Court judge about the urgent need for the approved plans, citing an £8 million weekly deficit if not implemented. The company, under financial strain, will receive an additional £15 million loan from Modella Capital, in addition to the £10 million loan secured in April, along with reduced rent rates for landlords.
In a recent hearing, Mr. Justice Hildyard expressed the challenging nature of the decision but ultimately sanctioned both plans. Last year, the high street shops transitioned from WH Smith to TG Jones after Modella’s acquisition, while WH Smith retained its stores in travel-centric locations like airports and train stations.
TG Jones operates approximately 450 stores with a workforce of 4,700 employees, primarily in the UK. Legal representation for TG Jones estimates that around 150 stores may shut down due to the restructuring, offering landlords the option to terminate leases if they do not agree to reduced rates.
The company has faced a decline in sales over time, worsened by factors such as inflation, the rise of online shopping, reduced consumer spending, as well as increased labor costs and taxes. The rebranding from WH Smith has also negatively impacted sales, according to statements.
Initially founded as a news vendor in 1792 by Henry Walton Smith and Anna, WH Smith evolved under their youngest son, William Henry Smith, in 1812, expanding throughout the 19th century. Following the family’s exit from the board in 1996, the company split its travel and high street stores, with the latter sold to Modella last year.
Mr. Justice Hildyard emphasized the complexity and reach of the approved plans in a written summary, stating his confidence in their potential success. TG Jones’s CEO, Alex Willson, expressed gratitude for the court’s approval, highlighting the plan’s role in enhancing the company’s sustainability and strength, thanking stakeholders and Modella Capital for their support.
