Victim to the vagaries of private equity investment, eight TG Jones (formerly WHSmith High Street) stores have closed as part of a restructuring plan that could lead perhaps 150 store closures and job losses, as owner Modella Capital battles to turn around the chain.
Among the immediate closures are the store on Westgate Street in Ipswich, which also housed a post office, which closes on Saturday 6th June.
The closures follow an admission by Modella that the forced move away from the WHSmith name had hit consumer awareness, despite what it described as improvements to the customer proposition. Behind the scenes, as we previously reported, there have been top level staff staff changes at the investment company as it sought to improve the fortunes of the stores.
Blaming “weak consumer spending” and rising operating costs, Modella set out its plan cor cost reductions and potential closures to landlords yesterday, the restructuring backed by more than £35m of financial support.
Modella claims the new investment will support the TG Jones turnaround, and help preserve the majority of the chain’s store estate.
“The survival of this iconic 234-year-old business is our imperative,” a TG Jones spokesperson claimed, adding the restructuring would protect most of the retailer’s store estate and build a stronger business.
The Guardian and Telegraph reported that eight stores are set to close immediately, while around 100 more are being asked to accept full rent holidays as part of the restructuring.
TG Jones, which currently employs some 5000 staff, is also understood to be seeking rent reductions across hundreds of other stores, with further closures possible if landlords reject the proposals.
A TG Jones spokesperson said: “The survival of this iconic 234-year-old business is our imperative,” adding that the restructuring was designed to protect the core of the estate and create a stronger, more sustainable retailer.
“While we continue to believe in the strength of the core business, TG Jones has experienced highly challenging trading conditions over the past year, along with many other brick-and-mortar retailers.”
A recent CBI survey notes British retailers reported the sharpest year-on-year decline in sales in more than 40 years as the Iran war raised households’ inflation fears.
Modella plan still requires creditor and court approval
WHSmith agreed to sell its British high street business to Modella in March 2025, then comprising 480 high street stores, for £76m last year. But WHSmith retained the brand name for their more successful Travel Stores operation in railway stations and airports, leading to the change to TG Jones, the name choice derided by some brand experts at the time.
Modella Capital held £12.8m in net assets in 2024, according to its most recent balance sheet. It also owns the freehold to the WHSmith headquarters on Greenbridge Road, Swindon, which the Swindon Advertiser reports has planning permission to be demolished so that a housing estate can be built on the land.
Modella’s restructuring plan, formulated with advice from consultancy Teneo and law firm Slaughter and May, still requires approval from creditors and the courts. The Guardian reported that industry insiders believe Modella had always intended to slim the chain down, potentially to around 350 stores, once restrictions linked to its WHSmith deal expire in June.
Private equity works by purchasing, restructuring, and selling companies to generate high returns, often outperforming public markets over long periods. It is a high-risk, 10-year investment model used by institutions. However, its methods – aggressive debt, cost-cutting, and layoffs – can be destructive to companies, earning PE a reputation as predatory, and some practices have raised concerns from voices across the political spectrum.
Rebranding issues part of wider woes?
While Britain’s high street businesses have faced significant challenges in recent years, there are concerns Modella underestimated those difficulties when it purchased the stores last year.
As reported by the Retail,Gazette, the private equity investor has seen failures to its wider portfolio, with fellow high street chains Claire’s and The Original Factory Shop both collapsing into administration. Their Hobbycraft property has also undergone store closures, as part of its own restructuring.
Customers saw little change to TG Jones stores beyond branding changes, and the company appears to have failed to reduce the number of lines on sale in its stores, which might have better served its interests. It also did not reverse WHSmiths policy of sidelining its Unique Selling Points – newspaper, magazine, comic, book and stationery sales – pushing those to back of stores, leading some customers to think they no longer sold them.
• The Guardian: Why your favourite brands are suddenly failing
• The Financial Times: How private equity tangled banks in a web of debt
Complex layers of leverage could pose a threat to the global economy
• The Spectator: Is private equity secretly running your life?
Hettie O’Brien delivers a broadside against the elusive financial force that owns almost 10 per cent of the UK economy
• House of Lords Library: Private equity: Role in the UK economy – House of Lords Library
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John is the founder of downthetubes, launched in 1998. He is a comics and magazine editor, writer, and Press Officer for the Lakes International Comic Art Festival. He also runs Crucible Comic Press.
Working in British comics publishing since the 1980s, his credits include editor of titles such as Doctor Who Magazine and Overkill for Marvel UK, Babylon 5 Magazine, Star Trek Magazine, and its successor, Star Trek Explorer, and more. He also edited the comics anthology STRIP Magazine and edited several audio comics for ROK Comics; and has edited several comic collections and graphic novels, including volumes of “Charley’s War” and “Dan Dare”, and Hancock: The Lad Himself, by Stephen Walsh and Keith Page.
He’s the writer of comics such as Pilgrim: Secrets and Lies for B7 Comics; “Crucible”, a creator-owned project with 2000AD artist Smuzz; and “Death Duty” and “Skow Dogs”, with Dave Hailwood.
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I always thought they’d play the masterstroke of pumping Hobbycraft products into the TG Jones stores but I guess Hobbycraft remaining in administration has interfered with that.