Dozens of Post Office counters in rebranded former WH Smith stores are feared at risk in TG Jones overhaul

Fears are growing that dozens of Post Office counters could disappear from Britain’s high streets after the new owner of WH Smith’s former retail arm moved in to facilitate the closure of its stores.

TG Jones, the chain created after private equity firm Modella bought WH Smith’s high street business last year, now operates 180 Post Office branches.

Up to 60 of them could close under sweeping restructuring proposals.

Plans focus on sharp rent reductions across large parts of the property; Homeowners are expected to refuse the low payments and instead demand their property back.

This could lead to the closure of up to 150 of TG Jones’ 450 stores across the country, threatening thousands of jobs.

Documents sent to creditors also reveal that Modella wants to shorten the notice period required to close Post Office outlets in affected stores from six months to just 56 days if the restructuring plan is approved.

Creditors are due to vote on the proposals next month.

Eight closures have already been confirmed, seven of which involve Post Office toll booths.

Areas affected are East Ham, Waltham Cross, Torquay, Hull, Ayr, Middleton and Solihull.

If a Post Office counter closes, the service will either need to be moved to another nearby facility or removed from the area altogether.

The Communications Workers Union (CWU) warned the move could lead to some communities being left without vital postal services.

CWU board member Mole Meade said areas that lost branches would ‘become postal deserts in the modern world’.

The union has repeatedly expressed concerns about the future of work since the Modella takeover; He has previously demanded “cast iron guarantees” on workers’ terms and conditions, fearing the firm might have “carpetbaggers looking to destroy its existence”.

Meade said this week: ‘For nearly 35 years we have been warning governments of all colors that handing over important social services like the Post Office to corporations would put shareholders ahead of the communities we serve.

‘The only thing they will do is close the parish and the royal post offices.’

Other compensation rights linked to branch closures will also be temporarily waived, according to restructuring documents reviewed by the Guardian.

Instead the Post Office will receive a payment of 170 per cent of the estimated profits from closing a branch, such as from share sales, with a minimum guaranteed payment of £500.

The revised notification requirements and compensation arrangements will remain in place until June 2029, after which existing Post Office rights will return to normal.

Last week, Modella said saving the ‘iconic 234-year-old business’ remained its priority at a time when the retailer was struggling with weak consumer demand and rising costs.

The firm also claimed that the forced change of brand from WH Smith to TG Jones had damaged trading performance, increasing the likelihood of store closures and redundancies.

Plans focus on sharp rent reductions across large parts of the property; Homeowners are expected to reject low payments and instead repossess their properties.

Modella said: ‘The restructuring plan is designed to preserve the important core of the store site and create a stronger, more sustainable business that can continue to serve customers for years to come.

‘We are extremely grateful to the many stakeholders who have pledged their support, including the Post Office and Toys R Us.’

The company had previously promised landlords it would turn TG Jones into the ‘hub of the high street’, expanding to 500 stores and combining postal and banking services with toys, books and educational products.

Modella is understood to be hoping to move some of the displaced Post Office branches to other businesses in its portfolio, including Hobbycraft stores.

A Post Office spokesman said: ‘We are fully aware of the challenging trading conditions currently faced by TG Jones and many other high street retailers.

‘Following TG Jones’ announcement of a restructuring plan on 7 May, it is regrettable that a small number of Post Office branches within TG Jones stores will close in the coming months.

‘We are working hard to find nearby locations to continue providing post office services.

‘We have a long-standing partnership with TG Jones and know that post offices attract significant footfall to the high street.

‘We will continue to work closely with TG Jones to understand what impact the restructuring plan may have on other stores that host post offices and are potentially at risk of closure.

‘We will also continue to support the many branches within TG Jones stores that serve thousands of customers each week and are not affected by this announcement.’

The state-owned Post Office, which is still facing the fallout from the Horizon IT scandal, has announced plans to close more than 100 branches in late 2024.

WH Smith’s travel division, which includes stores in airports, railway stations and hospitals, was excluded from the Modella takeover and remained owned by the listed parent company.

The Daily Mail has approached Modella and the Post Office for comment.