Private fairness group below fireplace because it plots closure of as much as 150 former WH Smith shops

The owner of WH Smith’s former High Street business was last night accused of presiding over a ‘retail bloodbath’ after paving the way for 150 store closures.

Modella Capital, which bought the chain last year for £40m and renamed it TG Jones, looks set to shutter around a third of the shops in a drastic overhaul that puts hundreds of jobs at risk.

The private equity group said ‘the decision has not been taken lightly’ and added ‘the survival of this iconic 234-year-old business is our imperative’.

The plan is just the latest blow to the High Street struck by Modella following the collapse of two of its other businesses – Claire’s Accessories and The Original Factory Shop.

Both were put into administration early this year with the loss of nearly 2,500 jobs just months after being taken over by Modella.

The buyout firm also owns Hobbycraft, where it last year closed 18 of its 124 stores with the loss of 126 jobs.

And now hundreds, if not thousands, face the axe at TG Jones, which currently employs 5,000 staff.

Charlotte Brumpton-Childs, national secretary at the GMB union, said: ‘This is a retail bloodbath and workers are being left for dead.

‘After the collapse of Claire’s and The Original Factory Shop, Modella Capital is once again presiding over chaos on the high street.

‘TG Jones staff are now standing on the brink, wondering if they are next.

‘Communities are paying the price for failed boardroom experiments.’

Modella, which was founded in August 2022 and is chaired by restructuring veteran and former Boots high-flyer Steve Curtis, has shifted from relative obscurity to becoming a major player on the High Street.

It has taken over five major brands with more than 900 stores employing more than 10,000 people.

But 300 stores have already closed down and more than 2,500 jobs have been lost.

The restructuring plan at TG Jones could take total store closures under Modella to 450 – or half the original number – with further job losses along the way.

Modella is also looking to slash rents at the remaining TG Jones stores to cut costs.

Modella said TG Jones ‘has experienced highly challenging trading conditions over the past year’ as it is hit by ‘weak consumer spending’ and rising costs ‘as a direct result of government policy and recent geopolitical events’.

Labour’s national insurance tax raid, higher business rates bills and increases in the national minimum wage are thought to have added several million pounds in overheads to the retailer.

The ‘forced name change’ from WH Smith has also hurt consumer awareness, the company said.

While WH Smith sold Modella its High Street estate, it still owns swathes of stores at travel hubs including train stations and airports under the WH Smith name, forcing Modella to rebrand its side of the business.

Dan Coatsworth, head of markets at AJ Bell, said: ‘Modella has learned the hard way that you cannot slap a new sign over the door and expect the same success as a shop’s previous owner. 

‘The conversion of former WH Smith stores into TG Jones has been nothing short of lazy and it’s no surprise to see the new outlets struggle. The stores are woefully under-invested and there is nothing special on offer to lure in the punters. 

‘WH Smith managed to wash its face on the high street thanks to a keen eye on costs and a strong brand. The TG Jones name is an unknown entity to the nation and Modella has failed to gain the public’s trust. 

‘Consumers are watching every penny and Modella’s takeover of the UK stores was poorly timed given growing cost pressures and a more cautious shopper. 

‘It’s an unfortunate situation for staff who will be worried about their jobs and who will want clarity over which stores are closing.’

A TG Jones spokesman said: ‘The survival of this iconic 234-year-old business is our imperative. No decisions have yet been taken on how this will impact roles, but we will aim to preserve as many jobs as possible.

‘We want to be clear, however, that the plan may result in the closure of some stores and the loss of some roles. We recognise the impact this uncertainty will have on colleagues, their families and the communities we serve.’