Up to 150 of TG Jones’s remaining 450 stores could close and thousands of jobs be cut under a restructuring plan proposed by its owner, Modella Capital. The Mayfair investment firm bought the former WH Smith high street chain last summer for a fraction of the original price.
Documents sent to creditors reveal that Modella has positioned itself as a key creditor, landlord and brand owner of the struggling retailer. The firm expects to have paid no more than £20m for the business, including its stores and Swindon head office, far below the £76m initially announced.
Modella already owns the TG Jones headquarters and is owed £2.1m in rent, which will be written off if the plan is approved. It also holds the rights to the TG Jones brand and is owed royalties of 1.03% of net revenue, though these fees are on a no-cash basis under an agreement with lender Aurelius.
The restructuring plan is due to be finalised by the end of June. If approved, TG Jones will pay reduced rent on its headquarters for a year, and half of the ongoing royalty fees will be due until 2029.
