Modella Capital Seeks Restructuring Plan for TG Jones Amid High Street Struggles
The owner of TG Jones, the high street retailer that was formerly WH Smith's high street division, is reportedly seeking a restructuring plan that could place approximately 80 of its stores in jeopardy. 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.
Details of the Acquisition and Rebranding
WH Smith divested its high street shops to Modella last year in a deal valued at around £76 million, 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, encompassing approximately 480 locations and transferring around 5,000 employees to Modella Capital.
Out of TG Jones's more than 450 outlets, approximately 80 are believed to be most at risk. 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."
Challenges in the Retail Sector
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 indicate that a store closure programme is one option for TG Jones, but that Teneo is considering alternative measures, including asking WH Smith for financial support. No final decisions have been made at this time, and Modella has been contacted for comment.
Impact on WH Smith's Business Strategy
WH Smith disappeared from the high street after the sale to Modella Capital, owner of the arts and crafts retailer Hobbycraft. High street shops have become a "much smaller part" of the group, according to its boss, with WH Smith's high street stores contributing just 15 percent of the group's overall profit. This move reflects a broader trend in the retail sector, where companies are shifting focus to more lucrative areas like travel retail.
