Modella Capital Seeks Restructuring Plan for TG Jones Amid Store Closure Fears
The owner of high street retailer TG Jones, which was formerly known as WH Smith's high street division, is reportedly seeking a restructuring plan that could place approximately 80 of its stores at risk of closure. Modella Capital, which acquired the chain last year, is understood to be in discussions with restructuring firm Teneo to stabilise the business following a period of weaker trading.
Details of the Acquisition and Rebranding
WH Smith divested its high street shops to Modella last year in a deal valued at around £76 million, opting to retain its more profitable travel retail operations, including those in airports and train stations. This acquisition led to the rebranding of the high street stores to TG Jones, encompassing approximately 480 outlets and transferring around 5,000 employees to Modella Capital. High street shops have become a "much smaller part" of the WH Smith group, with its boss noting they contribute just 15 percent of the group's overall profit.
Challenges on the High Street
Out of TG Jones's more than 450 outlets, approximately 80 are believed to be most at risk. This development follows Modella's recent decision to place other retail brands, Claire's Accessories and The Original Factory Shop, into administration after what it described as "last-ditch attempts to rescue them." The company, which specialises in retail investment and has become a significant name within the industry, said neither firms have a realistic chance of being profitable again and blamed a challenging climate on the high street for the financial troubles.
The administrations put some 1,355 employees in Claire's UK and Ireland shops and around 1,220 staff across The Original Factory Shop at risk. Reports indicate that a store closure programme is one option for TG Jones, but that Teneo is considering alternative measures, including asking WH Smith for financial support. No final decisions have been made, and Modella has been contacted for comment.
Broader Implications for British Retail
This situation highlights ongoing struggles in the British high street, with familiar names like Woolworths and Wilko having previously faced similar challenges. The move by WH Smith to sell its high street business reflects a strategic shift towards more lucrative travel retail operations, leaving the high street segment under new ownership and facing significant headwinds.
As Modella Capital navigates these difficulties, the future of TG Jones and its employees remains uncertain, underscoring the broader pressures on traditional retail in an evolving market landscape.
