Around 150 TG Jones stores are at risk of closure if a rescue deal receives court approval. The retailer, formerly known as WHSmith, has unveiled plans to shut 150 branches across the country and stop paying rent on a further 120 stores as part of a three-year turnaround strategy aimed at pulling the business back from the brink.
Rescue Plan Faces Criticism
The retailer's rescue blueprint has drawn fierce criticism, with detractors arguing that closing outlets as part of the survival plan offers no assurance the company will still be trading in three years' time, as outlined in the proposal. Should a judge reject the plan next month, TG Jones could reportedly be pushed into administration, according to the Express.
If the plans are given the green light, TG Jones would shut 150 of its locations. A full list has yet to be disclosed, but creditors insist the proposal does not go far enough.
Creditors and Landlords React
Speaking to Sky News, an anonymous creditor said: "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 same creditor also described the decision to pay 12% above base rate for the Modella-owned TG Jones name as "bizarre", adding: "It is bizarre that they agreed to pay millions of pounds for a completely unknown brand in the first place."
Meanwhile, an executive at one of TG Jones' landlords claimed it was unjust that Modella was "discounting profitable stores that on their own analysis are not overrented". The executive said: "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 TG Jones spokesperson responded: "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."
