The former WHSmith chain, rebranded as TGJones after its high-street arm was sold last year, is trying to push through a major restructuring that would close more than 100 stores and slash rents — and the past few weeks have seen the dispute turn increasingly bitter.
The plan matters locally because seven branches across south-west Wales were named as potentially at risk when the closures were announced, including the stores in Swansea’s Quadrant, Carmarthen, Llanelli, Neath and Bridgend.
None of those local stores has been confirmed for closure, and the wider plan still requires court approval — but the turmoil engulfing the chain has intensified on several fronts.
In Great Malvern, Worcestershire, landlords sent in bailiffs to reclaim a store this week. A notice displayed on the shuttered shop said the locks had been changed and the lease terminated, with any goods inside to be collected by arrangement before the end of June.
It followed the news that a group of major landlords had declared the terms of the restructuring “unacceptable”.
British Land — one of Britain’s biggest commercial property groups — told Sky News the plan was “fundamentally unfair”, arguing it would impose steep rent cuts even on profitable stores. It has instructed law firm Hogan Lovells to challenge the proposals, and has been joined in objecting by fellow landlords Landsec, M&G and NewRiver REIT.
The landlords’ challenge centres on proposals under which more than 120 of the chain’s 451 stores would pay no rent for three years, while others would see rent cut by between 15% and 75%.
Owner Modella Capital, the private equity firm that bought the high-street business for a cut-price £42m, has warned the retailer could run out of cash unless property owners agree to significant concessions.
A TGJones spokesperson said the company was aware of concerns raised by a “small number of landlords”, insisted the plan was “designed to be fair to all stakeholders”, and said the terms would leave landlords “no worse off than the alternative”. The firm said Modella was making more than £35m of financial contributions to support the restructuring.
Modella has blamed the loss of the 234-year-old WHSmith name for many of the chain’s difficulties.
Against that backdrop, the chain’s new chief executive Alex Jones — who previously ran Hobbycraft after Modella bought it — used social media to set out an eight-point plan to turn the business around.
The measures include lowering shop fittings to open up sightlines, brightening stores with new lighting and repairs, cutting prices now the chain is no longer tied to WHSmith’s airport and rail pricing, and reintroducing store managers to its biggest branches — which, he revealed, currently have none, with some area managers each responsible for as many as 75 stores.
He also promised to let local teams choose products suited to their communities, and to expand partnerships with the Post Office, Toys R Us and Hobbycraft once the restructuring is complete — though he conceded “there will be some store closures along the way”.
It is the Post Office presence in many branches that has driven much of the local concern. As many as 60 of the chain’s Post Office counters are reported to be under threat nationally.
In Neath, Sioned Williams MS — now Wales’s Deputy First Minister — wrote to TGJones demanding answers over which stores face closure, warning that losing the Neath branch would cut off vital services for older residents and those with limited mobility.
The uncertainty also comes amid earlier revelations that the chain owed millions in unpaid taxes, and that former owner WH Smith had refused to fund enhanced redundancy payments for staff facing the axe.
In Swansea, the Quadrant store’s landlord is Centurion Group, which is separately preparing to name new tenants for the former Debenhams in the city.
Modella has presided over the insolvencies of Claire’s and The Original Factory Shop in recent months, and has this week launched a separate restructuring affecting Wynsors World of Shoes.
For now, the seven south-west Wales TGJones branches remain open and trading, with their longer-term future tied to the outcome of the restructuring battle playing out in the courts.
