TG Jones could be pushed into administration before the end of July if creditors reject a proposed rescue package that may lead to up to 150 store closures.
The high‑street chain, formerly known as WHSmith, has warned lenders that the 234‑year‑old business faces collapse unless restructuring measures are approved and implemented by July 31.
Private equity owner Modella Capital, which bought WHSmith’s high‑street division last year for £40million, has proposed injecting around £35million in fresh funding to stabilise the retailer.
The plan would involve permanently shutting as many as 150 stores as the company attempts to stem mounting losses after a difficult year for the retail sector.
Creditors must approve the proposal, which will also be examined at a High Court hearing on June 29.
TG Jones said subdued consumer spending, ongoing cost‑of‑living pressures and rising operational costs linked to Labour policy had left the business trading at a loss.
The retailer currently operates around 480 stores, although eight branches have already closed this week as part of the restructuring process. The company also said the compulsory rebrand from WHSmith had damaged customer awareness.
A Modella spokesman said the forced name change had “negatively impacted consumer awareness, despite the proposition improving”.
High streets have been hit by a wave of closures since the pandemic | PAA TG Jones spokesman said launching the restructuring programme “had not been taken lightly” and described it as essential to the company’s turnaround.
Modella has secured support from several key commercial partners, including the Post Office, which operates kiosks in many TG Jones stores, and Toys R Us.
Staff at affected branches were expected to learn their fate on May 7.
Insolvency specialist Molly Monks of Parker Walsh said the retail sector’s transformation had accelerated sharply during the cost‑of‑living crisis.
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WHSmith stores were rebranded to TG Jones earlier this year | GETTYShe said discretionary spending had collapsed in many categories, while footfall outside major city centres remained well below pre‑pandemic levels.
Ms Monks also highlighted what she described as a structural imbalance between physical retailers and online competitors within the tax system.
“Business rates continue to penalise physical retail in a way that online competitors simply do not face,” she said.
Increases to the National Living Wage and higher employer National Insurance contributions had delivered “the final blow” for many struggling retailers.
“The sad reality is this pipeline of closures is far from over,” she added.