Modella Capital's private-equity ownership of the rebranded WH Smith shops could lead to TG Jones falling into administration by the end of July if their restructuring plans involving store closures and redundancies are not approved. The company, facing uncertain prospects, blames their forced turn from WH Smith as a negative factor impacting public brand awareness.
TG Jones could fall into administration by the end of July if restructuring plans involving the closure of 150 stores are not approved, lenders have been warned.
Modella Capital, the new private-equity owners of the rebranded WH Smith shops, outlined their rescue plan to the company's creditors. The proposals include Modella injecting £35million worth of funding into the business while slimming down the chain, with up to 150 stores to shut and staff to be made redundant. The plans also include landlords accepting long-term rent holidays or steep rent cuts or face the business going bankrupt.
It is understood that the new proposals say the business faces being put into administration if the plan has not been enacted by July 31. WH Smith's sales struggled for years before Modella bought its high-street arm last year for £40million and rebranded as TG Jones.
TG Jones is the third high street chain Modella bought that has run into serious financial trouble, with plans to expand WH Smith's retail operation to more than 500 stores while opening hundreds of Toys R US and Hobbycraft concessions. However, both The Original Factory Shop and Claire's Accessories were put into administration earlier this year, months after Modella took over. TG Jones's new restructuring plan must win the vote of three quarters of creditors and landlords to be implemented.
The plan will be heard in court on June 29, after which it could take effect
TG Jones Administration Modella Renegade WH Smith Shops Stores Independence High Street British Retailers Clough Road Islington Chronology
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