A major UK high street retailer is set to close more than 100 stores after a restructuring plan to save the business from insolvency has been approved by a London court.
TG Jones has been given the green light to overhaul its business model after the stationery retailer’s lawyer told a judge it was facing an £8million shortfall if the restructuring proposal was not approved.
As part of the confirmed plans, there will be an extra £15million loan from the company’s owners Modella Capital, as well as a top of £10million loaned in April, and reduced landlord rent rates.
Currently, there are an estimated 450 TG Jones stores with 4,700 staff, primarily based in the UK. The retailer was previously known as WH Smith.
A major retailer is closing more than 100 stores in a blow to UK high streets
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GETTYTom Smith KC from TG Jones confirmed the “working assumption” is close to 150 of shutdown as a result of these plans.
During a briefing hearing earlier this week, Mr Justice Hildyard said: “I am persuaded that it is the jurisdiction of the court to sanction both plans, and I decide to do so. I did not find this to be an easy matter.”
Last year, the high street staple saw its name changed from WH Smith to TG Jones after being purchased by Modella.
Notably, WH Smith still exists in travel locations across the UK, including airports and train stations.
TG Jones was formerly known as WHSmith | GETTY
The high street has been hit with store closures in recent months. | PA
Mr Smith noted that the business has experienced a “long-term sales decline”, due to multiple factors changing the British economy.
These include inflation, the rise in online shopping, reduced consumer spending, higher taxes and a spike in labour costs.
The representative for the beleaguered retailer admitted that the rebranding from WH Smith has also damaged sales.
WH Smith was founded by Henry Walton Smith and his wife Anna in 1792 in Little Grosvenor Street in Mayfair as a news vendor business.
Following their deaths, the company was taken over by their youngest son, William Henry Smith in 1812, and the business continued to grow throughout the following century.
The last of the Smith family departed from WH Smith’s board with the business opting to split its portfolio of travel and high street stores; the latter being sold to Modella.
As part of their written summary of the proposal, Justice Hildyard described the restructuring as being “complex” and “far-reaching”.
He added: “I have had to stand back, and ultimately subjectively assess, whether the plans have a realistic prospect of achieving their purpose, or whether in reality they are flawed, or more generally, whether the writing was on the wall for retail operations of this kind.”