Major high street retailer ‘could close 150 stores’ after changing its name | UK | News

A major high street chain has been given a dire warning that it risks closing 150 stores due to an £8m deficit. TG Jones, formerly WH Smith, is seeking court approval for a restructuring plan to avoid bankruptcy.

If it goes ahead, the plan would mean an extra loan of £15 million from the company’s owners, Modella Capital, on top of the £10 million loan in April, and reduced rental rates for landlords. The chain of high street stores was renamed TG Jones after it was bought by Modella last year, while WH Smith has kept the group of stores in its travel locations.

Tom Smith KC, for TG Jones, told the hearing on Monday that the business was “extremely distressed” after suffering a “long-term sales decline”.

He said the “working assumption” was that about 150 of these would close as a result of the plan, as landlords who did not want to accept the reduced rate could choose to terminate the lease.

Mr Smith added that tax, rent, suppliers and payroll payments this week would leave the company £8m short.

“The underlying problems faced by the sector lie in macroeconomic factors such as high inflation, transition to online shopping, decrease in consumer spending, increase in labor costs and increase in taxes.”

Ben Shaw KC, on behalf of the landlords group, said tenants were not opposed to the scheme following recent negotiations to defer rent payments for the first year of the scheme.

Mr Justice Hildyard is expected to make a decision on Wednesday.