Modella Capital Seeks Emergency Help for Former WH Smith Stores
The investment firm that acquired WH Smith's retail division has taken urgent action, bringing in emergency advisors to oversee a significant restructuring plan that could jeopardize approximately 80 stores. Modella Capital, which purchased the stationery chain's retail operations in June 2025, has enlisted consultancy firm Teneo to manage this critical process, according to reports from The Telegraph.
Background of the Acquisition and Previous Administration Cases
Modella Capital, which also owns the popular craft retailer Hobbycraft, previously placed The Original Factory Shop and Claire's Accessories into administration in January. This earlier move resulted in substantial job losses, affecting around 2,200 employees, and led to the closure of nearly 300 stores across the United Kingdom.
The firm completed the acquisition of 480 former WH Smith stores for £76 million in March of last year, operating them under the new brand name TG Jones. Reports indicate that approximately 80 of these TG Jones locations are currently at the highest risk of closure, with many additional stores potentially facing similar fates if landlords refuse to negotiate reduced rental agreements.
Challenges with Brand Transition and Sales Performance
Modella's acquisition agreement with WH Smith includes specific clauses that restrict the closure of struggling stores within the first twelve months following the takeover. Despite this protection period, the firm has privately acknowledged significant challenges with the TG Jones brand's market recognition.
Sales data reveals a clear disparity between stores that maintained the familiar WH Smith storefront and those that underwent complete rebranding to TG Jones. Locations retaining the original WH Smith branding have consistently outperformed their renovated counterparts, highlighting the importance of established brand identity in the competitive retail sector.
Broader Retail Industry Pressures
While the retail sector experienced an unexpected sales boost last month, industry leaders continue to voice concerns about mounting operational pressures. High employment costs combined with new workers' rights reforms have created additional financial burdens for retailers across the country.
A recent survey conducted by the British Retail Consortium reveals troubling trends among UK retailers. More than half (52 percent) of chief financial officers plan to reduce working hours, while 48 percent anticipate having to eliminate positions entirely to manage these increasing costs.
Modella Capital has declined to provide official comments to The Telegraph regarding the ongoing restructuring efforts and the future of the TG Jones stores. The situation continues to develop as negotiations with landlords and restructuring advisors progress.
