TG Jones launches restructuring plan to avoid summer insolvency

TG Jones, a British newsagent, stationer and book retailer formed from the sale and rebranding of WH Smith’s historic high street business, has launched a court-supervised restructuring plan that could result in the closure of up to 150 stores as owner Modella Capital races to avoid a potential administration by the end of July.

The proposed restructuring marks the latest attempt to stabilise one of Britain’s best-known retail chains following WH Smith’s decision last year to divest its struggling high street estate and focus exclusively on its more profitable travel division. Modella acquired approximately 480 stores and rebranded the business as TG Jones after losing the right to continue using the WH Smith name.

Under the proposed plan, Modella has committed to inject approximately £35 million of new funding into the business while pursuing a substantial reduction in the store portfolio. The restructuring is expected to involve significant lease compromises and store closures across the estate, with the retailer warning creditors that the company could enter administration if the plan is not implemented by July 31.

The restructuring proposal is scheduled to be considered by creditors ahead of a sanction hearing currently set for June 29. If approved, the plan would take effect shortly thereafter and provide the company with a mechanism to restructure liabilities notwithstanding opposition from certain creditor groups, including landlords.

The plan is expected to proceed using the cross-class cram-down power under Part 26A of the Companies Act 2006. The company has already begun reducing its footprint, with eight stores closing earlier this week. The broader restructuring could ultimately eliminate nearly one-third of the estate, reflecting mounting pressure on traditional high street retailers facing declining foot traffic, rising labour costs and competition from online operators and discount chains.

In communications to stakeholders, TG Jones attributed its financial difficulties partly to increased operating costs and partly to the loss of the WH Smith brand identity following the sale transaction. The company stated that the “forced” rebranding negatively affected customer recognition despite efforts to improve the in-store proposition.

Advisers from Teneo and law firm Slaughter & May have been reportedly been engaged to assist with developing the plan.