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TG Jones, WHSmith’s former high street business, will close more than a quarter of its stores after a court in London approved a restructuring plan designed to keep the 234-year-old chain from falling into administration.
A judge on Wednesday approved a proposal by Modella Capital, the chain’s private equity owner, aimed at restoring the struggling retailer’s fortunes.
Under the plan TG Jones proposes to close up to 150 of its 480 stores, make redundancies across its retail sites and support centre, and force landlords to accept much lower rent.
Modella’s proposal comes a year after it bought WHSmith’s high street business for an initial £10mn, with the aim of reviving the chain and making it “the heart of the high street”.
But last month it admitted the retailer was “almost completely broken”, blaming years of under-investment by the previous owner, which had focused on its more lucrative stores in travel hubs.
On Monday, the court heard that TG Jones was looking at a cash shortfall of about £8mn by the end of the week if the plan was not approved.
Tom Smith KC, representing TG Jones, described the plan as “enormously urgent”, adding that it would ensure the group “will not be burdened by poor-performing stores”. Alex Willson, chief executive of TG Jones, said: “We welcome the court’s approval of our restructuring plan. This decision allows us to move ahead with our turnaround strategy”.
