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Fears for former WHSmith's high street shops as new owner seeks help

Private equity firm Modella Capital has brought in advisers at Teneo to come up with a restructuring plan for the business - now trading as TG Jones - with roughly 80 stores believed to be most at risk

[TG Jones formerly known as WH Smith has brought in troubleshooters for the business]

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TG Jones, formerly known as WHSmith, has brought in troubleshooters for the business

The proprietors of WHSmith's former high street operation have brought in a squad of corporate troubleshooters less than 12 months after acquiring the chain.

Private equity firm Modella Capital has enlisted advisers from Teneo to devise a restructuring blueprint that will place the business now operating under the TG Jones banner on firmer ground.

The development will spark concerns about another wave of shop closures and redundancies at a time when Britain's high streets are already buckling under a succession of retail failures, including multiple chains within Modella's portfolio.

It's understood that approximately 80 TG Jones outlets from a total estate of roughly 480 face the greatest risk following a challenging trading period. The fate of dozens more could hang in the balance unless more favourable rental agreements can be hammered out with landlords, according to The Telegraph.

[WH Smith, stalwart of the British High Street disappeared after the company agreed a sale for its shops to Modella Capital and was rebranded as TG Jones]

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WH Smith, a stalwart of the British High Street disappeared after the company agreed a sale

Final decisions remain outstanding. Whilst a shop closure scheme represents one possibility under consideration, Teneo is anticipated to assess other options including seeking financial backing from WH Smith.

Modella's flexibility is constrained by an arrangement between both parties that essentially prevents it from shutting down underperforming locations for a year following its 40m acquisition. WH Smith divested the business last June, drawing the curtain on a 230-year fixture on Britain's high streets.

Retail industry insiders suggested that chronic underinvestment during its time under the previous parent company, Rachel Reeves's tax increases and a deteriorating economic climate had collectively c it the TG Jones business.

Rising employer National Insurance contributions and the National Living Wage alone are believed to have piled several million pounds onto running costs. One industry insider suggested retailers were grappling with a "dark market" where even long-established heavyweights such as Primark and B&M Bargains were now facing difficulties.

At the same time, supermarkets are capturing a larger portion of shoppers' spending, driven predominantly by stubbornly high food price inflation. Behind closed doors, Modella bosses acknowledge that the company also miscalculated the consequences of losing the right to keep the WH Smith branding above its stores following the acquisition.

Trading at outlets still awaiting conversion to TG Jones has performed more strongly than those already carrying the new name. The private equity firm has sought to revive the business's prospects by investing in store makeovers. One adviser described the shop portfolio as "one of, if not the most under-invested in the UK".

Altogether, 14 locations have benefited from fresh investment. Modella has become one of the most active buyers of struggling high street chains. Its track record, though, remains patchy.

Last month, the firm placed both The Original Factory Shop and Claire's Accessories into administration, decisions that resulted in 2,200 redundancies and prompted the closure of almost 300 shops. Modella declined to comment, reports the Telegraph.

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