Key facts
- TG Jones has agreed to concessions with landlords, including British Land, to secure approval for its restructuring plan.
- The retailer plans to close up to 150 stores as part of the restructuring.
- Suppliers, including the charity Help for Heroes, face losing at least half the money owed to them.
- TG Jones offered landlords a 50% share of future profits and repayment of rent reductions for key sites.
- British Land withdrew its objection to the plan and will abstain from voting after concessions were made.
TG Jones, the rebranded high street chain formerly known as WH Smith, has reached an agreement with its landlord British Land, a crucial step in its bid to avoid administration and implement a restructuring plan. The retailer, which acquired 480 former WH Smith stores last year for £40 million, is proposing to close up to 150 stores and cut rents on others to reduce costs.
British Land had initially opposed the plan, deeming it an "unfair allocation of burdens." However, TG Jones amended its proposal, offering landlords improved terms including a 50% share of future profits if the company does not reinvest, and repayment of rent reductions on key sites after three years. This led British Land to withdraw its objection and abstain from the upcoming creditor vote.
The restructuring plan, however, will significantly impact smaller suppliers, including the charity Help for Heroes, who are expected to lose at least half the money owed to them. "Exit contract" suppliers may see their debts entirely wiped out, while others will receive partial payment over several years. Larger "core suppliers," such as Condé Nast and Ferrero, will be repaid in monthly installments starting six months after the plan's approval.
Modella Capital, the private equity firm that bought the chain, plans to invest £35 million as part of the turnaround strategy, which it states is designed to create a stronger, more sustainable business. Despite the breakthrough with British Land, the positions of other landlords like Land Securities and New River REIT remain unclear.