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Jul
TG Jones' future in Harrogate and Ripon in doubt as judge gives green light to sweeping store closures
The future of TG Jones in Ripon and Harrogate hangs in the balance, after its owner won approval for a comprehensive restructuring which will see a third of its stores close.
The company, formerly WH Smith’s high street business, was bought and rebranded last year by Modella Capital, which shortly afterwards announced a restructure due to “challenging trading conditions”.
Under the latest plans, up to 150 of the company’s 451 stores will close, but it is not yet known which ones. It is also not known how many of TG Jones’ 4,700 employees will lose their jobs.
Locally, a question mark also hangs over Harrogate’s main Post Office counter, which is on the first floor of TG Jones' store in Victoria Shopping Centre.
TG Jones in Harrogate.
A spokesperson for the Post Office told us:
We fully recognise the challenging trading conditions that TG Jones and many other high-street retailers are facing at the moment.
We have a long-standing partnership with TG Jones and are following the progress of their Restructuring Plan, which has now been approved.
We encourage customers to continue to access Post Office services and products from our branches located within TG Jones stores.
Should there be any change to the store that hosts the Post Office, we will inform the local community as soon as we’re able to.
In addition to the store closures, TG Jones will pay no rent to about 120 landlords, and will receive rent cuts of between 15% and 75% on many of its other stores.
Modella says the measures are vital for the survival of the business and it will use some of the cost savings to invest in stores as part of its turnaround strategy.
The store closures were originally announced in May, but have been delayed due to legal wranglings. The restructuring plan has faced some resistance from suppliers and landlords, many of whom stand to lose a lot of income.
The plan forecasts the business will end up with around 300 stores, although the exact figure will depend on how many landlords exercise their right to terminate TG Jones’ lease rather than accept slashed rents.
TG Jones in Ripon.
The High Court heard this week that TG Jones was on the brink of insolvency and was facing a cash shortfall of nearly £8m by the end of this week, unless the rescue deal was approved.
The judge, deciding whether Modella’s plans were fair to creditors, approved them this morning, meaning closures look set to start soon.
Alex Willson, TG Jones chief executive, said:
This decision allows us to move ahead with our turnaround strategy. The plan protects the substantial core of the store estate and makes TG Jones a stronger, more sustainable business.
The Stray Ferret has contacted the Post Office and Victoria Shopping Centre's owners for more information.
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