Modella Capital, the owner of stationery retailer TG Jones, has taken decisive action by appointing professional advisers from Teneo to formulate a comprehensive restructuring plan. This strategic move aims to bolster the business's performance, but it places around 80 stores out of a total of 480 in a precarious position, with reports indicating they are 'most at risk' of closure.
Challenging Trading Conditions Prompt Action
The decision comes against a backdrop of what Modella Capital describes as 'tough' economic conditions for the UK high street. A spokesperson for the investment firm elaborated on the pressures facing retailers, stating, 'The combination of cost inflation, weak consumer confidence and adverse Government fiscal policies puts significant pressure on all retailers.'
TG Jones, which was formerly WH Smith's high street division before being acquired by Modella last year in a deal valued at approximately £76 million, has encountered significant difficulties. The chain, rebranded to TG Jones following the acquisition, has experienced a period of weaker trading, prompting this urgent review.
Restructuring Options Under Consideration
While a store closure programme remains a potential outcome, Teneo is reportedly exploring alternative measures to mitigate the impact. These include the possibility of seeking financial support from WH Smith, though no final decisions have been made at this stage. The advisers are tasked with creating a plan to put TG Jones on a stronger, more sustainable footing for the future.
Modella Capital has expressed its commitment to the business, with the spokesperson adding, 'TG Jones' management and Modella Capital are committed to building a sustainable future for this important UK business.' Since taking control, Modella has invested in refurbishing 14 TG Jones stores and has scheduled further refits throughout 2026, indicating a long-term strategy despite current challenges.
Broader Retail Struggles for Modella Capital
This development follows recent actions by Modella Capital, which specialises in retail investment and has become a notable player in the industry. The company recently placed Claire's Accessories and The Original Factory Shop into administration after 'last-ditch attempts to rescue them,' blaming a challenging high street climate for their financial troubles. These administrations put approximately 2,575 employees at risk across both chains.
The situation underscores the ongoing pressures on traditional retail businesses in the UK, with factors such as inflation, consumer spending habits, and government policies creating a difficult operating environment. As Modella Capital works with Teneo to navigate these challenges, the fate of TG Jones's stores and employees hangs in the balance, awaiting the outcome of the restructuring plan.
