The High Court has approved a major restructuring plan for TG Jones, the retailer formerly known as WH Smith’s high street business, clearing the way for the closure of up to 150 stores and significant rent reductions across much of its remaining estate.
The decision marks a critical step in the company’s efforts to avoid insolvency after owner Modella Capital argued that the retailer was facing severe financial difficulties. The restructuring is expected to reshape the chain, which currently operates 451 stores and employs around 4,700 people across the United Kingdom.
Modella Capital acquired WH Smith’s high street business last year and rebranded it as TG Jones after the sale. WH Smith retained its travel retail operations at airports and railway stations, along with the rights to the historic WH Smith brand.
Under the approved restructuring plan, around 120 landlords will receive no rent for up to three years, while rents at hundreds of other stores will be reduced by between 15% and 75%. The company said the savings generated by the plan would help stabilize the business and support investment in its remaining stores.
Court proceedings revealed the scale of the retailer’s financial challenges. Lawyers representing TG Jones said the company faced a cash shortfall of nearly £8 million and would have run out of money within days without court approval. The retailer had already relied on a £10 million loan from Modella Capital and deferred several liabilities, including tax payments, to continue operating.
Modella attributed the company’s problems to years of declining sales, underinvestment by previous owners and difficult trading conditions affecting the wider retail sector. The company also said losing the well-known WH Smith brand had added to the challenges of rebuilding customer confidence.
The restructuring plan initially faced opposition from several landlords, led by property company British Land, which argued that the proposals unfairly shifted the financial burden onto property owners. Following negotiations and revisions to the plan, British Land withdrew its objections, although many suppliers are also expected to absorb financial losses as part of the restructuring.
If fully implemented, the company expects to operate approximately 302 stores, although the final number will depend on whether landlords choose to terminate leases instead of accepting reduced rental payments.
In approving the plan, Mr Justice Hildyard acknowledged its wide-ranging impact, particularly on landlords. However, he concluded that the restructuring represented the better outcome compared with the likely alternative of administration, describing it as the “lesser of two evils” given the retailer’s financial position.
TG Jones Chief Executive Alex Willson welcomed the ruling, saying it would allow the company to move forward with its turnaround strategy while preserving a substantial core of the business.
The court’s decision comes as Britain’s retail sector continues to face mounting pressure from rising operating costs, higher business rates and reduced footfall, prompting an increasing number of store closures across the country’s high streets.
