Sunday, April 26, 2026, 10:22 a.m
The private equity backers that run almost 500 former WH Smith stores have delayed announcing an “aggressive” restructuring that could force the closure of up to 100 stores.
Modella Capital, the Mayfair public company that runs hundreds of the stationer’s former stores, has run into financial difficulties and was expected to submit rescue proposals last week.
The private equity firm bought WH Smith’s 480 high street stores for £40 million in June last year and renamed many of its sites TG Jones.
But Modella’s ownership of the brick-and-mortar giant is mired in uncertainty, with stores that have lost the WH Smith name reportedly performing worse.
The owners have sought crisis advice from consultancy Teneo and law firm Slaughter and May and are reportedly preparing for a drastic restructuring that could result in the closure of up to 100 branches.
TG Jones seeks Supreme Court approval
According to the Sunday Times, Modella will initiate a “cram-down” – a novel measure that can allow companies to move ahead with a restructuring with the approval of just one class of creditors.
TG Jones needs a Supreme Court judge to approve this restructuring and must prove that it is the only way to prevent the company from falling into bankruptcy.
The plan will reportedly impose significant rent cuts on many landlords and is expected to face opposition from TG Jones.
“This is really aggressive stuff,” a City source told the Sunday Times.
TG Jones had planned to announce the restructuring last week but delayed the announcement at the last minute.
Modella Capital has acquired a number of retail stores in recent years, often selling the acquisitions shortly after the purchase.
Modella Capital is considering selling off its latest asset
The Original Factory Shop closed all 137 stores last week after the budget department store went bankrupt less than two years after it was bought by Modella.
The public company is reportedly considering a sale of Wynsors World of Shoes, a northern shoe retailer it acquired just four months ago.
Founded in 2022 as Tailer Debtco before rebranding to Modella a year later, Modella is owned by Hay Wain Group, the family office founded by turnaround specialist Jamie Constable.
According to its most recent balance sheet, Modella had a net worth of £12.8 million in 2024.
WH Smith – which retained its branches in airports, hospitals and train stations as part of the deal with Modella – is bracing for a fall in profits.
The retailer has become more reliant on its airport stores since losing its high street locations, and the company said on Thursday it was suffering from the slowdown in international tourism caused by the Iran war.
WH Smith shares tumbled after the company announced a “more cautious outlook”, citing a pre-tax loss of £25 million in the six months to February and forecasting a narrower profit for next year.
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