WH Smith successor to shut 150 stores in ‘aggressive’ restructuring
The owner of WH Smith’s former high street stores is set to shut as many as 150 of them as part of an “aggressive” overhaul which will put jobs at risk.
Modella Capital bought the stationer’s 480 high street stores for £40m last year, and is now set to shut more than a quarter of these sites.
The Mayfair-based private equity firm had intended to position the stores, which have been renamed TG Jones, as the “hub of the high street”.
The restructuring, detailed in a memo seen by the Financial Times, will come at the expense of up to 150 stores.
Modella said it has not taken the decision lightly, saying “the survival of this iconic 234-year-old business is our imperative”.
The private equity firm had previously delayed the restructuring, which was initially due to be kicked off last month.
Stores have struggled without WH Smith name
The rescue plan, advised by consultancy Teneo and law firm Slaughter and May, was dubbed “aggressive stuff” by a City source.
Previous reports had suggested that the former WH Smith stores were suffering because of their loss of the iconic name, and Modella has confirmed that the business has struggled since it was “forced” to lose this branding.
The rebrand has “negatively impacted consumer awareness, despite the fact that the proposition has improved,” Modella said.
Modella Capital has snapped up a string of high street retailers in recent years, often offloading the acquisitions soon after purchase.
The Original Factory Shop and Claire’s Accessories shut all of its stores last month, after the two retailers were put into administration less than two years after being bought by Modella.
Modella snaps up high street assets
The private equity firm is reportedly weighing a sale of Wynsors World of Shoes, a northern shoe-seller it acquired just four months ago.
Modella was formed as Tailer Debtco in 2022 before being renamed to Modella a year later, and is owned by Hay Wain Group, the family office founded by turnaround specialist Jamie Constable.
Modella held £12.8m in net assets in 2024, according to its most recent balance sheet.
WH Smith – which retained its stores in airports, hospitals and train stations in the deal with Modella – is preparing to take a profit hit.
The retailer is more reliant on its airport stores since losing its high street locations, and the firm said last month it is suffering from the slowdown in international tourism caused by the Iran war.
Shares in WH Smith tumbled after it said it is adopting a “more cautious outlook,” citing a £25m pre-tax loss in the six months to February and forecasting a lower profit for the coming year.