A court has approved a restructuring of TG Jones, WH Smith’s former High Street business, which will see up to 150 shops close as well as steep rent cuts for most of the remaining stores.
Modella Capital bought the 451-store chain last year, rebranding the famous old stationery business under the invented new name.
WH Smith travel stores, mainly in railway stations and airports, were not part of the deal and the business kept the rights to the historic brand.
Some retail analysts say the TG Jones name has failed to appeal to shoppers, though Modella blamed challenging retail conditions for poor trading and the need for a radical restructuring plan.
It told the high court that it had a cash shortfall of £8m and without drastic action it would struggle to avoid insolvency.
As well as store closures, about 120 landlords will receive no rent for up to three years; and rent will be cut on hundreds of other stores by between 15% and 75%.
Tom Smith KC, for TG Jones, told the hearing that the business would have run out of cash in April had it not been for a £10m loan from Modella and a deferral in liabilities including a large tax bill from HMRC.
Modella also blamed its problems on serious underinvestment by the chain’s previous owners.
Property owner British Land led opposition to the restructuring plan, describing it as “fundamentally unfair”, though it was persuaded to accept the terms after Modella offered a number of concessions.
Once the plan is complete, TG Jones will have 302 stores depending on how many landlords exercise their rights to terminate the lease instead of accepting reduced rents.
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