- Up to 150 TG Jones stores could shut under a High Court-approved restructuring.
- The retailer warned it was days away from running out of cash without the rescue plan.
- Landlords and suppliers will bear the biggest financial hit as the business fights for survival.
The former WH Smith high street business, now trading as TG Jones, has secured court approval for a sweeping rescue plan that could see up to 150 stores close across the UK as it battles to avoid collapse.
The restructuring, approved by the High Court, gives owner Modella Capital the green light to overhaul the struggling retailer through store closures, steep rent reductions and debt write-offs. The company argued that without the plan, it would have run out of money within days, putting thousands of jobs at risk.
TG Jones currently operates 451 stores and employs around 4,700 people. The retailer was acquired by Modella Capital last year after the sale of WH Smith's high street business, while WH Smith retained its travel stores and brand name.
A race against time
Court documents painted a bleak picture of the retailer's finances. Lawyers for TG Jones said the business was "highly distressed" and "running on fumes", reportedly warning it faced a cash shortfall of almost £8 million by the end of the week unless the restructuring was approved.
The court also heard the company had narrowly avoided running out of cash earlier this year after receiving a £10 million emergency loan from Modella Capital, alongside deferred tax payments and other liabilities.
Approving the restructuring, Mr Justice Hildyard ruled that creditors would be no worse off than if the business had entered administration. While he did not explain his decision in court, a summary of the judgment is expected to be published separately.
The judge is also understood to have questioned the retailer's valuation, noting it had reportedly fallen from about £40 million when Modella acquired the business to no more than £3 million after the proposed restructuring.
Landlords and suppliers shoulder the pain
The turnaround plan will reshape the retailer's footprint over the next two years. 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 per cent and 75 per cent.
The retailer expects to operate around 302 stores once the restructuring is complete, although the final number will depend on whether landlords choose to terminate leases instead of accepting lower rents.
Many landlords strongly opposed the proposals. Property owner British Land initially described the plan as "fundamentally unfair", although it later withdrew its objections after Modella offered concessions. Small suppliers, including card and toy manufacturers, are also expected to lose a significant share of the money owed to them.
Industry analysts suggest the ruling could make it easier for other struggling retailers to push through similar restructuring plans, particularly where commercial rents are involved.
TG Jones blamed years of underinvestment under previous ownership, combined with difficult trading conditions and the loss of the WH Smith brand, for its financial troubles.
Chief executive Alex Willson reportedly said the court's decision would allow the company to press ahead with its turnaround strategy, adding that the restructuring would protect the core of the business and put it on a more sustainable footing.
