WH Smith buyer seeks help with dozens of TG Jones shops at risk of closure
The owner of high street retailer TG Jones, formerly known as WH Smith’s high street division, is reportedly seeking a restructuring plan that could jeopardize around 80 of its stores.
Modella Capital, which bought the chain last year, is understood to be in talks with restructuring company Teneo to stabilize the business following a period of weak trading.
Around 80 of TG Jones’ more than 450 outlets are believed to be most at risk. WH Smith transferred its high street stores to Modella last year in a deal worth around £76 million, opting to keep its more profitable travel retail operations including airports and train stations.
This acquisition led to the rebranding of the high street stores as TG Jones.
The development follows Modella’s decision to place its other retail brands, Claire’s Accessories and The Original Factory Shop, into administration following what it described as “last-ditch attempts to save them”.
The company, which specializes in retail investment and has become an important name in the sector, said that the chances of both companies becoming profitable again were unrealistic and blamed the difficult climate on the high street for financial difficulties.
The administrations put approximately 1,355 staff at Claire’s UK and Ireland stores and approximately 1,220 staff at The Original Factory Shop at risk.
Reports have said that a store closure program is an option for TG Jones, but Teneo is considering alternative measures, including seeking financial support from WH Smith, and no final decision has yet been made.
Modella has been contacted for comment.
WH Smith has disappeared from the high street following a deal to sell its UK high street business to investment firm Modella Capital, owner of arts and crafts retailer Hobbycraft, for £76 million.
The move replaced the familiar WH Smith name with the TGJones brand and involved around 480 high street stores, with around 5,000 employees transferred to Modella Capital.
The boss said high street stores had become a “much smaller part” of the group. WH Smith’s high street stores contribute just 15 per cent of the group’s overall profits.
