TG Jones, the retailer formerly known as WHSmith, has secured a High Court-approved rescue plan that will see the business restructured but result in the closure of 150 stores across the UK. In the Birmingham area, four TG Jones locations are at risk, though specific stores have not been confirmed.
Rescue Plan Details and Store Closures
Modella Capital, the owner of TG Jones, had its insolvency plans approved by the High Court. Lawyers for the company stated that TG Jones was suffering from a “long-term sales decline” and was “highly distressed.” Factors cited include high inflation, increased online shopping, reduced consumer spending, and higher labour costs. The rebrand from WHSmith was also noted as negatively impacting sales.
It is understood that tax assets are expected to be worth about £8 million, meaning the total takeover could involve no more than £18 million going to WHSmith.
Creditor and Expert Reactions
Speaking to the Guardian, one creditor expressed cautious optimism: “I think they genuinely believe they can make a good fist of it and are creating a national retailer.” However, the source added: “I wouldn’t give them more than a one in three chance.”
Vernon Dennis, head of business advisory at law firm Howard Kennedy, commented: “This is a high-stakes test for Modella; if it can combine a restructuring of its balance sheet and consequent cost discipline with a genuine retail turnaround, TG Jones could stabilise; if not, it risks becoming a larger version of the failures we’ve already seen.”
Impact on Birmingham
Birmingham currently has four TG Jones stores, formerly WHSmith outlets. The exact locations affected by the closures have not been announced, leaving employees and customers uncertain about the future of these branches. The restructuring is part of a broader effort to revive the brand amidst challenging retail conditions.
