Modella Capital, the British private equity firm who bought high street arm of WHSmith just last June, is reported to be planning to close “scores” of shops.
The grim news is likely to dismay publishers still reliant on high street distribution for the majority of their print sales, impacting visibility for their titles, from 2000AD and Commando to SHIFT and Doctor Who Magazine.
Retail Gazette reports the TG Jones owner has appointed Teneo as advisers to draw up restructuring plan for retailer, following reports, including from The Telegraph, that 80 of the remaining 480 stores are at risk of closure.
“Scores more” could also be at risk if the Modella cannot secure improved rent deals with landlords, The Telegraph said.
These possible closures follow the loss of plenty of WHSmith High Street shops under its previous owner, which has refocused on its travel stores, retaining the WHS brand in railway stations and at airports.
The closure reports follow hot on the heels of the announcement that TGJones has appointed a new chief executive, following the departure of Sean Toal, who led the business for six years, less than a year after the sale of the renamed WHSmith high street division. He will be replaced by Hobbycraft CEO Alex Wilson.
Sky News reported that Modella, which also owns Hobbycraft, is in early-stage talks would could result in a formal restructuring plan “within months”.
On his blog, Sky News City editor Mark Kleinman reported Modella has been lining up advisers for weeks to work on a plan that could close a “significant minority” of stores under the rebranded TG Jones name.
“That would be likely to entail job losses running to hundreds of staff,” he said.
Retail Gazette reports the private equity firm’s ability to act is constrained by the terms of its takeover agreement, which reportedly stops it from shutting underperforming shops for 12 months after the £40m deal.
Alas WHSmith and TG Jones: Brand identity issues?
Modella executives have conceded that the business underestimated the impact of being unable to keep the WHSmith name above the stores under the terms of its buyout, according to reports.
Stores that are yet to be rebranded as TG Jones are understood to be performing better than the sites that have been modified.
This will come as no surprise to those who criticised the rebrand when it was announced, such as Peter Matthews, Nucleus founder & CEO, who clearly felt the TG Jones name choice unwise, and its logo design.
“The trouble is the name is fake,” he wrote last April. “Obviously fake. Fake heritage can’t replace real heritage, so don’t try when your customers see straight through it. Mirroring the past also sends a strong message that there will be no innovation, just run-down stores selling the same stuff, when the opportunity is surely to revitalise and renew the high street newsagent’s value proposition. A meaningful new name might have helped communicate a positive intention.”
Kirsty Fenlon at KOB Design was similarly critical in an article offerings better approach. “A high street brand revamp should be versatile, not bland. A modern retail brand needs to live across hundreds of touchpoints — in-store, digital, packaging, and wayfinding. The visual identity needs to flex confidently without becoming sterile. This means layered brand elements: secondary marks, patterns, graphic motifs that extend the personality, not erase it.”
Retail at risk
Responding to reports of the possible closures, a Modella Capital spokesperson said: “The economic conditions for all retail businesses are tough. The combination of cost inflation, weak consumer confidence and adverse government fiscal policies puts significant pressure on all retailers.
“Against this backdrop, the management of TGJones is working hard to turn around this important retail business, and they are drawing on the best available advice in doing so.
“TGJones’ management and Modella Capital are committed to building a sustainable future for this important UK business.”
• TGJones is online at tgjonesonline.co.uk
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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.
Categories: British Comics, Comics, downthetubes Comics News, downthetubes News, Magazines, Merchandise, Other Worlds
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Oh Dear! This chain is really one of the last to have a large range of comics and magazines. The supermarket shelf is no substitute. If no one sees your product, no one buys it. Hard times ahead.
It’s certainly disappointing. The problem underlying this is the decision by previous management to expand into so many different lines beyond its core business, diluting its Unique Selling Point, confusing customers. Plus, making it hard for the current owners to manage sprawling lines of supply and suppliers, not helped by having to rebrand – further exacerbated by woeful rebranding decisions, IMHO.
Presumably ‘John Menzies’, and ‘Menzies’ were, and are still available, as WH Smith are not using it. The logo is already existing, and it’s not been gone so long that it is unknown to a large part of the public.
Two things here …
1. It’s staggering to think the name change could conceivably have a huge effect on sales. They’re the same store with essentially the same logo, I doubt many people even notice as they buy their newspaper.
2. I’ve always liked how TG Jones sounds like a GTA world version of WH Smith that somehow broke out into our world. It’s not quite the real world name, but we “get” it.
As Gerald Edwards posted, this chain is really one of the last to have a large range of comics and magazines. Everything is catered for, from comics and TV magazines to magazines about music, aviation, cricket, etc.
In my area, corner shops have given up on periodicals outside a token selection of newspapers, a TV magazine, and the seemingly ubiquitous and “obligatory” fishing magazine.
Supermarkets also appear to be about a token selection of top-selling newspapers. I haven’t seen the likes of 2000 AD and COMMANDO in a supermarket in years.
Will impulse and casual buying be gone? A friend of mine occasionally picks up COMMANDO if the subject is of interest, but I doubt he will be subscribing. Perhaps that title, and the two Judge Dredd comics, might be more reliant on subscribers. But how can the younger generation discover certain comics if they don’t know of their existence?
Just feels very bleak.
IMHO, TG Jones has too many lines and no recognisable IP, and the perception from the public in general is that what it does sell is more expensive than bought elsewhere.
Modella maintained the same business model as WHS for its high street stores, rather than making radical changes to what it sold; and continues to offer the same muddled and hard to manage variety of items, rather than strip back and refocus on what most would expect to see in what was once, at its core, a high street bookshop, newsagent and stationery store. Admittedly, all three core offerings under threat from electronic alternatives, but Waterstones retrenched and made their bookshops work, so it is possible to succeed on the high street with print. They just need to think differently.
I agree.
I don’t go into TG Jones for wrapping paper, chocolate, or whatever else they’re selling this week. I understand business, but why muddy the waters? Reminds me of a video store back in the 90s that started devoting space to car accessories.
Also, I must admit, in my local branch at least, there seems to be less interest in regularly ordering in magazines. Back in 1995, when I moved to my current area, nothing was too much trouble whenever you requested a book or magazine. Now, it seems there’s disinterest, quite honestly (not all staff of course); if they can’t even try to help with books and periodicals, I’m certainly not going to be going in there for stationery and food, which is cheaper elsewhere.
It’s a shame Borders didn’t last in the UK. They had such a wide range of magazines, including some usually only sold in North America.
WH Smith sold their high street stores as the only profitable part of the existing business was at travel hubs.
I think many expected to see a rapid introduction of Hobbycraft sections into the TG Jones stores after their first Christmas of new ownership but instead they ploughed on with the same fayre. That was never going to be sustainable if Smiths couldn’t make it work with all the data they possessed.