High Street chain could enter administration in weeks

Retail group TG Jones, formerly WH Smiths high street shops, faces financial difficulties and could collapse by July 31, if lenders do not approve a major restructuring proposal.

Modella Capital, which owns the high street chain, has put forward a turnaround plan that includes injecting £35 million of funds into the business and potentially closing up to 150 stores.

A spokesman for TG Jones said: “The decision to launch an overhaul had ‘not been taken lightly’ and that it was an ‘essential part of the company’s turnaround.'”

Eight store closures have already taken place, and the company has warned that additional locations are at risk if the plan does not go ahead.

The business has stated that failure to gain approval for the restructuring would face being put into administration if the plan is not in place by July 31.

TG Jones said the “forced name change from WH Smith” has affected brand awareness and contributed to its challenges, along with rising operational costs driven by government policy.

The chain was rebranded last year following its acquisition by Modella Capital; the WH Smith brand remains in use at travel outlets such as airports and railway stations.

A vote by creditors and a High Court hearing are required for the plan to proceed.

The court hearing is scheduled for June 29.

The business is reportedly considering using a legal mechanism known as a “cram-down”, which can allow a restructuring plan to be pushed through with the approval of one class of creditors and the High Court, even if other creditors object.

When did WHSmith get taken over?

The potential closures come less than a year after Modella completed the purchase of WHSmith’s high street arm, which included 464 stores across high streets, shopping centres and retail parks.