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A court has approved a restructuring of TG Jones, WH Smith\u2019s former High Street business, which will see up to 150 shops close as well as steep rent cuts for most of the remaining stores.<\/p>\n
Modella Capital bought the 451-store chain last year, rebranding the famous old stationery business under the invented new name.<\/p>\n
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.<\/p>\n
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. <\/p>\n
It told the high court that it had a cash shortfall of \u00a38m and without drastic action it would struggle to avoid insolvency.<\/p>\n
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%. <\/p>\n
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 \u00a310m loan from Modella and a deferral in liabilities including a large tax bill from HMRC.<\/p>\n
Modella also blamed its problems on serious underinvestment by the chain\u2019s previous owners.<\/p>\n
Property owner British Land led opposition to the restructuring plan, describing it as \u201cfundamentally unfair\u201d, though it was persuaded to accept the terms after Modella offered a number of concessions.<\/p>\n
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.<\/p>\n
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