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Modella Capital, which acquired the former WH Smith High Street stores last year, has received court approval for an extensive restructuring plan. This overhaul includes closing up to 150 shops and significant reductions in rent for most of the remaining locations. Following the acquisition, the stores were rebranded as TG Jones, currently operating 451 outlets and employing around 4,700 staff.
The travel-focused WH Smith stores found in airports and railway stations were not part of the sale, with WH Smith retaining the rights to their historic brand. However, within less than a year of the purchase, Modella revealed a major restructuring strategy aimed at addressing “challenging retail conditions.” Their plan involves not only shuttering numerous shops but also implementing rent relief measures—about 120 landlords will receive no rent payments for up to three years, while many others will see rent reductions ranging from 15% to 75%.
In court this week, it emerged that TG Jones was facing a severe financial crisis and would encounter a cash deficit approaching £8 million by the end of the week if this rescue scheme was not authorized. Tom Smith KC, representing TG Jones, described the situation as “highly distressed” and said the company was “running on fumes.” He added that without a £10 million loan from Modella and deferred liabilities including a substantial HMRC tax bill, the business would have already run out of cash earlier in the year.
Modella attributed some difficulties to previous owners’ lack of investment, which had led to long-term sales decline, as well as ongoing tough retail conditions and the loss of the WH Smith brand name rights. The restructuring faced strong opposition, notably from property owner British Land, who initially branded the proposals as “fundamentally unfair.” After Modella offered some concessions, British Land withdrew its objections. The final plan anticipates TG Jones operating around 302 stores, although this depends on how many landlords decide to terminate leases rather than agree to lowered rent terms.
Presiding over the case, Mr Justice Hildyard had to determine whether the plan was fair, specifically if creditors stood to be no worse off than they would be in an administration scenario. He approved the restructuring this morning without providing immediate reasons on the record, noting a judgment summary would be published later. TG Jones CEO Alex Willson expressed relief and optimism following the decision, stating, “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.
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