More than 120 TG Jones high street stores could close after the company won court approval for a sweeping restructuring plan. Landlords are being asked to accept no rent for the next three years as part of cost-cutting measures to stave off insolvency.
Court Approval Granted
Lawyers for TG Jones told a High Court judge that the company faced an £8 million weekly shortfall if the plans were not sanctioned, describing the company as “highly distressed”. Mr Justice Hildyard approved the proposals in a brief hearing on Wednesday, 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.”
Financial Details
The confirmed proposals include an extra £15 million loan from the company’s owners, Modella Capital, on top of £10 million loaned in April, along with reduced rent rates for landlords. The chain, renamed from WH Smith last year after being bought by Modella, operates around 450 stores with 4,700 staff, mostly in the UK.
Store Closure Projections
Tom Smith KC, representing TG Jones, said on Friday that the “working assumption” is that around 150 stores will close as a result of the plans, as landlords who do not wish to accept the reduced rates can choose to terminate the lease. He cited “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 also damaged sales, he added.
Historical Context
WH Smith was founded in 1792 by Henry Walton Smith and his wife Anna as a news vendor in Mayfair. The business expanded through the 19th century under their youngest son, William Henry Smith. The last Smith family member left the board in 1996, and the company split its travel and high street stores, selling the latter to Modella last year.
Judge's Remarks
Mr Justice Hildyard said in a written summary that the approved plans are “complex” and “far-reaching in their effect”. He added: “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.”
CEO Statement
Alex Willson, CEO of TG Jones, said: “We welcome the court’s approval of our Restructuring Plan. 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.”
