TG Jones, the former WHSmith high street business, is facing an uncertain future as a High Court judge has delayed a decision on its restructuring plan. The delay puts approximately 480 stores and 5,000 jobs at risk. The company, acquired by Modella Capital last year and rebranded from WHSmith, is racing against time to secure approval for its rescue plan, which includes closing up to 150 stores and implementing other cost-saving measures.
Modella Capital plans to invest $£35 million into the business as part of the turnaround. The restructuring also involves rent reductions and changes to supplier repayment terms. The retailer had warned it might struggle to meet millions of pounds of payments due this week if the rescue plan wasn't approved. Mr Justice Hildeyard stated he needed more time to consider the complex case, leaving the business's fate in flux.
The restructuring plan has faced scrutiny from landlords and suppliers. While British Land, a major landlord, initially opposed the plan, it has now withdrawn its objection after TG Jones offered concessions, including paying back rent reductions after three years for some stores and providing security for these payments. TG Jones also offered landlords a 50% share of future earnings if funds are not reinvested. However, other landlords, including Land Securities and New River REIT, are reportedly still opposing the restructuring. Alex Willson, CEO of TG Jones, has warned that the entire business would go bust without a deal.
Non-core suppliers could recover less than half of the money they are owed, and some "exit contract" suppliers could see their debts wiped out completely. The former WHSmith estate was sold to Modella Capital last year as WHSmith shifted its focus to its more profitable travel business, which operates in airports, railway stations, and hospitals, and is not affected by the current restructuring.
