A significant number of former WH Smith high street stores, now operating as TG Jones, face closure as part of a comprehensive restructuring plan. Modella Capital, the company that acquired WH Smith’s high street business for £40 million last year, is proposing to shut down as many as 150 stores, potentially resulting in substantial job cuts among its workforce of 5,000 employees.
Despite initial plans to expand the business, WH Smith’s high street segment has encountered challenging market conditions and increased expenses. The shift away from the WH Smith brand has also deterred customers. The focus of the remaining WH Smith business has shifted to its travel stores in airports, railway stations, and hospitals.
Issues such as the high costs of store refurbishments, with many stores reportedly not updated for years, have contributed to the need for restructuring. Modella Capital will enter negotiations with store landlords to determine the final number of closures, with up to 150 of the 480 TG Jones stores potentially being affected. The outcome will be decided in two upcoming High Court hearings.
Furthermore, the potential closures also pose a threat to numerous Post Office branches located within TG Jones stores. Modella Capital has been actively acquiring struggling retailers, including Hobbycraft, the Original Factory Shop, and Claire’s Accessories. Despite these acquisitions, Hobbycraft is up for sale, while the other two brands have entered administration.
In response to the situation, a spokesperson for TG Jones stated that a restructuring plan has been initiated to ensure the company’s future viability. The plan, integral to the company’s turnaround strategy, aims to facilitate long-term investments in stores. Modella Capital has committed over £35 million to support this process.
The spokesperson highlighted the challenging trading environment faced by TG Jones and other physical retailers, citing weak consumer spending, cost-of-living pressures, and escalating operational costs. They emphasized the importance of preserving jobs and engaging in transparent consultations regarding any potential store closures or workforce reductions.
While the fate of the business remains uncertain, the focus is on sustaining the 234-year-old company. Efforts will be made to minimize the impact on employees, families, and communities. Clear communication and collaboration with all stakeholders will guide decisions regarding store closures and job losses.