The future of stationery retailer TG Jones looks set to be decided in a few days’ time.
Creditors are voting this week on a restructuring plan that could determine whether the former WH Smith high street chain survives or falls into administration. The proposals will also require approval from the High Court.
Investment firm Modella Capital, which acquired the business last year and rebranded it as TG Jones, has warned that the retailer is unlikely to remain solvent if the plan is rejected.
As previously reported by W360, the restructuring could result in the closure of up to 150 stores across the UK, while many remaining locations would operate under reduced or suspended rental agreements as the business attempts to return to profitability.
In recent days, Modella has revised its proposals in an effort to secure creditor support. The updated plan includes commitments to repay some rent reductions after three years, provide landlords with additional financial security and offer a greater share of future profits under certain conditions.
The changes have persuaded one of the retailer’s largest opponents, property owner British Land, to withdraw its formal objection and abstain from the vote. However, the company maintained that restructuring plans should not unfairly shift the financial burden onto landlords while shareholders avoid contributing fresh equity.
Other landlords are still understood to have reservations about the proposals, while reports suggest some suppliers also face delayed repayments or write-offs depending on how they are classified under the restructuring.
Modella has said the turnaround plan is intended to create a more sustainable business and protect the majority of the retailer’s estate. A court is expected to rule on the restructuring by the end of June.
