More than 25% of the former high street stores belonging to WH Smith face potential closure as part of extensive restructuring plans. These stores, now known as TG Jones, are at risk of shutting down, jeopardizing numerous jobs within the company’s workforce of 5,000 employees.
Modella Capital, which acquired WH Smith’s high street division for £40 million last year, has proposed a significant overhaul to address the struggling performance of the business. Despite initial intentions to expand operations, the company has encountered challenging trading conditions and escalating expenses. Management attributes part of the decline to the rebranding from WH Smith, which has deterred customers. As a result, WH Smith’s focus has shifted to its travel stores located in transportation hubs and hospitals.
Insiders point to the high costs associated with renovating the stores, noting that many have not undergone substantial updates in years. Negotiations between Modella and store landlords will determine the fate of up to 150 out of the 480 TG Jones outlets, with final decisions expected after two scheduled High Court hearings next month.
The potential closures also pose a threat to several Post Office branches housed within TG Jones stores. In recent months, Modella Capital has acquired struggling retail brands like Hobbycraft, the Original Factory Shop, and Claire’s Accessories. However, Hobbycraft is now up for sale, while the latter two have entered administration.
A spokesperson for TG Jones stated that a formal restructuring plan is underway to ensure the company’s viability and pave the way for future investments in store enhancements. Modella Capital has committed over £35 million to support this process, emphasizing the necessity of adapting to challenging market conditions and financial pressures.
While no final decisions regarding job cuts have been made, the company acknowledges the likelihood of store closures and potential role reductions. TG Jones aims to engage transparently with employees and their representatives throughout the restructuring process, prioritizing job preservation wherever feasible. The company underscores the importance of sustaining its longstanding business legacy, despite the uncertainties ahead.