The High Court has approved a major restructuring plan for TG Jones, the high street chain formerly known as WH Smith, which will result in the closure of approximately 150 stores and affect hundreds of jobs. The plan, sanctioned on Wednesday, is intended to save the business from insolvency.
Court Approval and Financial Details
Mr Justice Hildyard approved the restructuring plan, stating: “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.” Lawyers for the retailer had informed the court that the company faced an £8 million shortfall if the plan was not approved, describing the company as “highly distressed.” The approved proposals include an additional £15 million loan from owner Modella Capital, on top of £10 million loaned in April, along with reduced rent rates for landlords.
Impact on Stores and Jobs
TG Jones, which operates around 450 stores with 4,700 staff primarily in the UK, had previously warned that the overhaul would put jobs at risk but has not disclosed exact numbers. Tom Smith KC, representing TG Jones, stated on Friday that the “working assumption” is that around 150 stores will close as landlords who reject reduced rent rates can terminate leases. The company has suffered from “long-term sales decline,” exacerbated by high inflation, increased online shopping, reduced consumer spending, and higher labour costs and taxes. The rebranding from WH Smith has also damaged sales, according to Smith.
Company Background and Future Outlook
TG Jones was renamed last year after Modella Capital acquired the high street stores, while WH Smith retained its travel-location outlets. The chain traces its roots to 1792 when Henry Walton Smith and his wife Anna established a news vendor in Mayfair. The final Smith family member left the board in 1996, and the company split its travel and high street operations last year. Alex Willson, CEO of TG Jones, welcomed the court’s decision: “This decision allows us to move ahead with our turnaround strategy. The plan protects the substantial core of the store estate and makes TG Jones a stronger, more sustainable business. We are incredibly grateful to all the colleagues, partners and stakeholders who engaged constructively throughout the process, and to Modella Capital for its continued financial commitment.” Mr Justice Hildyard noted in a written summary that the plans are “complex” and “far-reaching in their effect,” adding that he had to assess whether they had a realistic prospect of success. He concluded: “I propose to sanction the plans.”
