Modella slammed over TG Jones charges for utilizing title

The private equity group planning to shut up to 150 former WH Smith stores faced a backlash last night after it emerged it is charging millions to use the new ‘TG Jones’ name.

Modella Capital, which bought the high street arm of WH Smith for £40m last year and rebranded it TG Jones, is set to close around a third of the 450-plus shops, putting hundreds of jobs at risk.

The plan, which includes moves to slash rents at surviving TG Jones stores, comes after the collapse of Modella-owned Claire’s Accessories and The Original Factory Shop this year.

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

The carnage has raised questions over Modella’s retail know-how.

And it faces questions over the fees it is charging TG Jones to use the much-derided name after the disastrous rebranding failed to revive its fortunes. The fees so far total £2.9m – as revealed by The Guardian – though these look set to be written off if Modella’s restructuring is approved.

Backlash: Modella Capital faces questions over the fees it is charging TG Jones to use the much-derided name after the disastrous rebranding failed to revive its fortunes

The revelations sparked outrage from unions. Charlotte Brumpton-Childs, the national secretary of the GMB, said: ‘This is an insult to everyone trying to keep these stores alive.

‘Workers and landlords are being sold a fake family brand. It is outrageous that staff are expected to accept instability and sacrifice while money is being funnelled out through manufactured corporate structures. It is exploitation dressed up as tradition.’

Modella has faced criticism since blaming the proposed closures on a ‘forced name change’ and ‘highly challenging trading conditions’.

The private equity firm said the rebranding – which came as WH Smith kept the original name for its stores at airports and train stations – has ‘negatively impacted consumer awareness’.

But analysts suggested this should have been no surprise given the stores were struggling even under the WH Smith name.

Susannah Streeter, chief investment strategist at Wealth Club, said: ‘The rebrand was always going to be fraught with difficulty given that WH Smith was such a recognised brand.

‘Customers had no affinity with TG Jones. The aim clearly was continuity, an attempt to plug into another British name preceded by random initials and similar brand colours, but that strategy was always going to be a struggle.’