TG Jones, the former WHSmith high street business, has launched a restructuring plan that could lead to store closures and job losses, as owner Modella Capital battles to turn around the chain.
It said on Wednesday that the plan, backed by more than £35m of financial support from Modella, would include cost reductions and potential closures across its store estate.
TG Jones said no final decisions had yet been made on closures or redundancies, but The Guardian reported that eight stores are set to close immediately, while around 100 more are being asked to accept full rent holidays as part of the restructuring.
The business is also understood to be seeking rent reductions across hundreds of other stores, with further closures possible if landlords reject the proposals.
A TG Jones spokesperson said: “The survival of this iconic 234-year-old business is our imperative,” adding that the restructuring was designed to protect the core of the estate and create a stronger, more sustainable retailer.
Modella acquired WHSmith’s high street business last year in a deal initially valued at £76m, with the shops rebranded as TG Jones as WHSmith shifted its focus to its faster-growing travel retail arm.
The sale brought an end to the WHSmith name on UK high streets after more than two centuries, although WHSmith’s travel stores, which were not included in the deal, continue to trade separately.
TG Jones said the business had faced “highly challenging trading conditions” over the past year, pointing to weak consumer spending, cost-of-living pressures and rising operating costs linked to government policy and geopolitical disruption.
The retailer also admitted that the forced move away from the WHSmith name had hit consumer awareness, despite what it described as improvements to the customer proposition.
The restructuring plan will need approval from creditors and the courts. The Guardian reported that industry insiders believe Modella had always intended to slim the chain down, potentially to around 350 stores, once restrictions linked to its WHSmith deal expire in June.
TG Jones currently employs around 5,000 staff, meaning the proposals could put thousands of jobs at risk if a significant number of closures go ahead.
The retailer’s difficulties come after a turbulent period for Modella’s wider portfolio, with fellow high street chains Claire’s and The Original Factory Shop both collapsing into administration, while Hobbycraft has also undergone store closures as part of its own restructuring.
Modella said its £35m investment would support the TG Jones turnaround and help preserve the majority of the chain’s store estate.
The TG Jones spokesperson added: “While we continue to believe in the strength of the core business, TG Jones has experienced highly challenging trading conditions over the past year, along with many other brick-and-mortar retailers.”
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