THE future of a high street stationery chain hangs in the balance as bosses battle to save the business from collapse.
TG Jones, which was previously known as WH Smith, and its owners Modella Capital are racing to convince creditors to support its plans for a major restructure.
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The deal would see up to 150 of its 450 shops close but would keep the business afloat while saving thousands of jobs.
The chain currently has around 5,000 employees.
Last week the chain offered its creditors a package of revised terms in a bid to convince them to back the restructure.
It promised them a greater share of future profits in return for supporting the turnaround plans, according to documents seen by The Jattvibeday Times.
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If approved the plans would see the chain’s remaining landlords hit with steep rent cuts.
Landlords of more than 120 stores will receive no rent for a three year period, while rent will be cut on hundreds of other stores by between 15-75%.
The chain’s chief executive Alex Willson and Modella Capital would then implement a turnaround plan.
But landlords have already criticised the plans, with commercial landlord British Land labelling them as “fundamentally unfair”.
Under the proposals landlords who host profitable stores will also have to accept a rent cut.
Meanwhile, it argued that the majority of the burden from restructuring will be placed on property owners, instead of shareholders, who will benefit from the proposals.
As a result, many could decide to stop TG Jones from leasing their sites.
The plans need to be signed off by a judge before they can be implemented and a hearing is scheduled for June 29.
As part of the turnaround plans TG Jones has also pledged to reduce prices for shoppers and sell fewer but better products.
Some shops have already done this and axed thousands of individual products.
Meanwhile, the chain’s partnerships with Toys R Us, the Post Office and Hobbycraft will be expanded.
There are also plans to renovate stores as many need upgrading.
Modella Capital has become known for purchasing struggling businesses including Hobbycraft, the UK arm of Claire’s accessories and The Original Factory Shop.
Both Claire’s and The Original Factory Shop entered administration this year, which resulted in job losses and store closures.
TG Jones was approached for comment.
