More than 120 TG Jones high street stores are facing potential closure following court approval for a significant restructuring. Landlords of former WH Smith stores are being requested to agree to a three-year rent-free period as part of cost-cutting measures to prevent insolvency.

Legal representatives for TG Jones informed a High Court judge of an £8 million weekly deficit the company is confronting if the proposed plans are not endorsed. The court-sanctioned proposals entail an additional £15 million loan from Modella Capital, the company’s owners, on top of a previous £10 million loan in April, along with reduced rent rates for landlords.

During a brief hearing, Mr. Justice Hildyard expressed the court’s jurisdiction to approve both plans, acknowledging the complexity of the decision. TG Jones, previously known as WH Smith, was acquired by Modella last year, with the remaining WH Smith business retaining stores in travel-centric locations such as airports and train stations.

The chain currently operates around 450 TG Jones stores with approximately 4,700 employees predominantly based in the UK. According to Tom Smith KC, legal representative for TG Jones, an estimated 150 stores may cease operations due to the restructuring, allowing landlords unwilling to accept reduced rates to terminate leases.

The company has been grappling with a prolonged sales decline exacerbated by factors like high inflation, increased online shopping, reduced consumer spending, and escalating labor costs and taxes. The rebranding from WH Smith has also impacted sales negatively.

Established in 1792 by Henry Walton Smith and Anna, WH Smith transitioned ownership to their youngest son, William Henry Smith, in 1812. The business expanded throughout the 19th century, culminating in the split between travel stores and high street outlets in 1996, with the latter sold to Modella last year.

In a written summary, Mr. Justice Hildyard emphasized the approved plans’ complexity and far-reaching impact, expressing confidence in their potential to address the company’s challenges. TG Jones CEO, Alex Willson, welcomed the court’s approval of the Restructuring Plan, highlighting its significance in advancing the company’s turnaround strategy and ensuring its sustainability.