TG Jones faces administration if not restructuring by end of July, lenders told

TG Jones’ lenders have been warned that the retailer faces being put into administration by the end of July if they do not approve restructuring plans to close up to 150 shops.

Modella Capital, the owner of the chain that was formerly WH Smiths high street shops, has laid out its turnaround plan to the company’s creditors.

Its proposals involve Modella injecting some £35 million worth of funding into the business while also slimming down the chain, following eight stores being shut down earlier this week.

It intends to close up to 150 shops as part of the restructuring and said there could be job losses as a result.

It is understood that the proposals say the business would face being put into administration if the plan is not in place by July 31.

The restructuring plan must win the vote of creditors and also get approved at a High Court hearing set for June 29, after which it would take effect.

A spokesman for TG Jones earlier this week said the decision to launch an overhaul had “not been taken lightly”, and that it was an “essential part of the company’s turnaround”.

The company said the retailer’s “forced name change from WH Smith” had had a negative impact on people’s awareness of the brand, while also saying Government policy pushing up business costs was partly to blame.

The chain of high street shops was renamed to TG Jones last year after being bought by Modella, while WH Smith kept its group of stores in travel locations like airports and train stations.

The travel division made up the bulk of its sales and profits prior to the sale of the high street arm, and has grown to more than 1,200 stores across 32 countries.