TG Jones, the high street chain formerly known as WH Smith, has been saved from insolvency after a High Court-approved restructuring plan, but the rescue will result in the closure of approximately 150 stores, putting jobs at risk.
Court Approval and Financial Details
Lawyers for TG Jones told a judge on Friday that the company faced an £8 million shortfall that week if the plans were not sanctioned, describing the company as “highly distressed”. The proposals, approved by Mr Justice Hildyard, include an additional £15 million loan from the company’s owner, Modella Capital, on top of a £10 million loan provided in April, as well as reduced rent rates for landlords.
Mr Justice Hildyard said in a brief hearing on Wednesday: “I am persuaded that it is the jurisdiction of the court to sanction both plans and it is my decision to do so. I did not find this to be an easy matter.” In a written summary, he described the plans as “complex” and “far-reaching in their effect”, adding: “I have had to stand back, and ultimately subjectively assess, whether the plans have a realistic prospect of achieving their purpose, or whether in reality they are flawed, or more generally, whether the writing was on the wall for retail operations of this kind.” He concluded: “I propose to sanction the plans.”
Store Closures and Job Impact
There are around 450 TG Jones stores in the UK, employing approximately 4,700 staff. Tom Smith KC, representing TG Jones, said the “working assumption” is that around 150 of these stores will close as a result of the restructuring, as landlords who do not wish to accept reduced rent can choose to terminate their leases. The closures are expected to put jobs at risk, although specific numbers have not been confirmed.
Reasons for Decline
Smith KC attributed the company’s struggles to “long-term sales decline”, exacerbated by high inflation, increased online shopping, reduced consumer spending, and higher labour costs and taxes. He also noted that the rebranding from WH Smith to TG Jones had damaged sales. The chain was renamed last year after being bought by Modella Capital, while WH Smith retained its travel-location stores in airports and train stations.
Historical Background
WH Smith was founded in 1792 by Henry Walton Smith and his wife Anna in Little Grosvenor Street, Mayfair, as a news vendor. After their deaths, their youngest son, William Henry Smith, took over the business in 1812, and it expanded throughout the 19th century. The last member of the Smith family left the board in 1996. The company later decided to split its travel and high street operations, selling the high street arm to Modella Capital last year.
The approved restructuring plan is intended to secure the future of the remaining TG Jones stores, but the closure of around 150 outlets marks a significant contraction of the once-ubiquitous high street presence.
