The owner of the former WH Smith high street stores, Modella Capital, is set to close as many as 150 locations as part of an aggressive restructuring plan that puts jobs at risk. The private equity firm bought 480 stores from WH Smith for £40 million last year and has since renamed them TG Jones.
Restructuring Details
According to a memo seen by the Financial Times, the restructuring will result in the closure of up to 150 stores. Modella stated that the decision was not taken lightly, emphasizing that "the survival of this iconic 234-year-old business is our imperative." The firm had previously delayed the restructuring, which was initially scheduled to begin last month.
The rescue plan, advised by consultancy Teneo and law firm Slaughter and May, has been described as "aggressive stuff" by a City source. Modella acknowledged that the business has struggled since it was forced to lose the WH Smith branding. The rebrand has "negatively impacted consumer awareness, despite the fact that the proposition has improved," the company said.
Modella's Track Record
Modella Capital has a history of acquiring high street retailers and later offloading them. Recently, The Original Factory Shop and Claire's Accessories shut all stores after being put into administration less than two years after Modella bought them. The firm is also reportedly considering selling Wynsors World of Shoes, a northern shoe retailer it acquired just four months ago.
Modella, originally formed as Tailer Debtco in 2022 and renamed a year later, is owned by Hay Wain Group, the family office of turnaround specialist Jamie Constable. The company held £12.8 million in net assets in 2024, according to its latest balance sheet.
Impact on WH Smith
WH Smith retained its stores in airports, hospitals, and train stations after selling its high street locations. The company is now more reliant on its airport stores and has reported a slowdown in international tourism due to the Iran war. WH Smith posted a £25 million pre-tax loss in the six months to February and forecast lower profits for the coming year, causing its shares to tumble.
