TG Jones, the former WHSmith high street business, is facing fresh fears over its future after a High Court judge delayed a decision on its restructuring plan.
The retailer, which was bought by Modella Capital last year and rebranded from WHSmith, warned it could struggle to meet millions of pounds of payments due this week without approval for the rescue plan, The Telegraph reported.
Mr Justice Hildeyard said he needed more time to consider the complex case, leaving the future of the business hanging in the balance.
The delay puts around 480 stores and 5,000 jobs at risk, as TG Jones races to secure approval for a restructuring that would allow it to cut costs and keep the business trading.
The former WHSmith estate was sold to Modella Capital last year as WHSmith shifted its focus further towards its more profitable travel business, which operates in airports, railway stations and hospitals and is not affected by the current restructuring process.
Under the proposed plan, TG Jones is expected to close up to 150 stores as part of a wider overhaul of the business. Modella has previously said the restructuring is needed to protect the core of the store estate and build a more sustainable business.
The plan has faced scrutiny from landlords and suppliers, with some smaller suppliers expected to suffer significant losses if the restructuring goes ahead.
The Guardian previously reported that non-core suppliers could recover less than half of the money they are owed, while some “exit contract” suppliers could see debts wiped out altogether.
Modella has said it plans to invest £35m into the business as part of the turnaround, which would also involve rent reductions and changes to supplier repayment terms.
TG Jones has been under pressure since the takeover, with the business battling weak trading, high costs and the wider decline of traditional high street retail.
The chain has also been attempting to reposition itself after the end of the WHSmith name on the high street, with new management pledging to improve stores, lower prices and rebuild customer trust.
However, the delayed court ruling has raised the prospect that the retailer could run out of time before its restructuring plan is approved.
WHSmith’s travel stores remain separate from TG Jones and continue to be owned by WH Smith PLC.
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