The owner of TG Jones, the high street retailer formerly known as WH Smith’s high street division, is reportedly seeking a restructuring plan that could jeopardise around 80 of its stores.
Modella Capital, which acquired the chain last year, is understood to be in discussions with restructuring firm Teneo to stabilise the business following a period of weaker trading.
Out of TG Jones’s more than 450 outlets, approximately 80 are believed to be most at risk. WH Smith divested its high street shops to Modella last year in a deal valued at around £76m, opting to retain its more profitable travel retail operations, including those in airports and train stations.
The acquisition led to the rebranding of the high street stores to TG Jones.
This development follows Modella’s recent decision to place other retail brands, Claire’s Accessories and The Original Factory Shop, into administration after what it described as "last-ditch attempts to rescue them."
The company, which specialises in retail investment and has become a significant name within the industry, said neither firms have a realistic chance of being profitable again and blamed a challenging climate on the high street for the financial troubles.
The administrations put some 1,355 employees in Claire’s UK and Ireland shops and around 1,220 staff across The Original Factory Shop at risk.
Reports said that a store closure programme was one option for TG Jones, but that Teneo was considering alternative measures including asking WH Smith for financial support, and that no final decisions had been made.
Modella has been contacted for comment.
WH Smith disappeared from the high street after a deal to sell its UK high street business to investment firm Modella Capital, owner of the arts and crafts retailer Hobbycraft, for £76m.
The move saw the familiar WH Smith name replaced by the TGJones brand and encompassed approximately 480 high street stores, transferring around 5,000 employees to Modella Capital.
High street shops have become a “much smaller part” of the group, its boss said. WH Smith’s high street stores contribute just 15 per cent of the group’s overall profit.
