TG Jones, the former WHSmith high street business acquired by Modella Capital, is planning to close as many as 150 of its 480 stores in the UK and reduce its workforce as part of a formal restructuring plan.
Details of the plan emerged from an internal memo seen by the Financial Times, which indicated that redundancies are expected both at store level and within the company’s support centre.
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The first wave of closures, affecting eight locations, is due to be communicated today (7 May), with the total projected to reach between 100 and 150 stores over time.
In a statement to Retail Insight Network, a TG Jones spokesperson said: “The restructuring plan is designed to protect the substantial core of the store estate and create a stronger, more sustainable business that can continue to serve customers for years to come.”
The spokesperson added that the “decision has not been taken lightly” and that “the survival of this iconic 234-year-old business is our imperative”.
TG Jones’ loss-making position was attributed to a combination of subdued consumer spending, cost-of-living pressures and rising operating costs stemming from government policy and geopolitical developments.
They also cited the rebranding away from the WHSmith name as a factor that had “negatively impacted consumer awareness, despite the fact that the proposition has improved”.
On staffing, the representative said: “No decisions have yet been taken on how this will impact roles, but we will aim to preserve as many jobs as possible.”
They added that any closures or role reductions would be subject to consultation, with a commitment to engage “openly and constructively” with colleagues and their representatives.
The restructuring process will involve negotiations with landlords and creditors to reduce operating costs and secure additional financing, with a court hearing scheduled for next month.
Modella rebranded the business following WHSmith’s decision to retain its name as it concentrated on its travel retail division.
Under WHSmith ownership, the high street operation had seen falling sales and declining footfall, with capital directed primarily towards its airport and travel hub stores.
According to the spokesperson, TG Jones had secured backing for the restructuring plan from the Post Office and Toys R Us, both of which run concessions within its stores.
The development represents the latest setback for Modella, which has assembled a portfolio of distressed retail assets over the past 18 months, including Hobbycraft, Claire’s Accessories and The Original Factory Shop.
Hobbycraft has since been put up for sale, while Claire’s and The Original Factory Shop have entered administration.
