TG Jones, the high street retailer formerly known as WHSmith, has announced plans to close 150 stores across the UK and cease paying rent on a further 120 shops as part of a three-year rescue plan to avoid insolvency. The proposal, which requires court approval, has drawn sharp criticism from creditors who argue it does not go far enough to secure the company's long-term future.
Details of the Rescue Plan
Under the restructuring plan, TG Jones will shutter 150 locations nationwide and halt rent payments on an additional 120 stores. The company, which controversially rebranded from WHSmith, aims to reduce costs and stabilise its finances over three years. However, if a judge rejects the proposal next month, the retailer could face administration, according to reports.
A complete list of the stores earmarked for closure has not been disclosed. The plan has been submitted to creditors and landlords for approval, with a court hearing expected to decide its fate.
Creditor and Landlord Reactions
An anonymous creditor told Sky News: "It presupposes that the company will have sufficient cash in three years to pay an upside at all while the business will still have to repay its debts." The creditor also criticised the decision to pay 12% above the base rate for the Modella-owned TG Jones name, calling it "bizarre" and questioning why the company agreed to "pay millions of pounds for a completely unknown brand in the first place."
An executive at one of TG Jones' landlords expressed frustration, stating that Modella was "discounting profitable stores that on their own analysis are not overrented." The executive added: "Any landlord who keeps providing those stores is effectively giving a loan to the business of the amount by which the rent has been reduced - but not getting paid for it at anything like the same rates as Modella is getting."
Company Response
A spokesperson for TG Jones said: "We are aware of suggestions made by a small number of landlords in connection with the Restructuring Plan. We have engaged constructively with these landlords, as we have with other creditors across the estate. As a result of that engagement, we have improved the terms of the Plan to reflect feedback received. We believe these improvements demonstrate our commitment to achieving a satisfactory outcome for all stakeholders."
Impact and Outlook
The proposed closures represent a significant contraction for the retailer, which rebranded from WHSmith in a move that drew widespread attention. Critics argue that the rescue plan offers no guarantee the company will remain trading beyond the three-year period. The outcome now rests on the court's decision, with creditors and landlords closely watching the proceedings.
