Former WH Smith chain suppliers face debt cuts in restructuring vote
8 reported
Small suppliers to the former WH Smith high street chain, now called TG Jones, are expected to lose at least half of the money owed to them if a restructuring plan is approved by creditors on Wednesday. The retailer, which has 450 stores, was bought by private equity firm Modella Capital last year and rebranded. The company has said it will likely call in administrators if creditors do not approve the amended plan, which is designed to cut costs. Dozens of “exit contract” suppliers that TG Jones does not wish to work with in future could have their debts wiped out entirely, while “non-core” suppliers including the charity Help for Heroes would receive less than half of what they are owed. Larger suppliers such as Condé Nast, Ferrero, and Lonely Planet will not be repaid in full for a year. Modella has said the plan is an essential part of the company’s turnaround and that it will invest £35 million. The leading landlord British Land initially opposed the plan but has since withdrawn its objection and will abstain from voting.
What’s reported
Small suppliers to TG Jones, the former WH Smith chain, face losing at least half of debts under a restructuring plan.
The retailer has 450 stores and was bought by Modella Capital last year.
A vote on the amended restructuring plan is scheduled for Wednesday.
TG Jones has said it will likely call in administrators if the plan is not approved.
“Exit contract” suppliers could have debts wiped out; “non-core” suppliers including Help for Heroes will receive less than half owed.
Larger suppliers Condé Nast, Ferrero, and Lonely Planet will not be repaid in full for a year.
Modella plans to invest £35 million and says the plan is essential for the company’s turnaround.
British Land initially opposed the plan but withdrew its objection and will abstain from voting.
Key figures
Modella Capital (private equity firm, owner of TG Jones)
TG Jones (retailer, formerly WH Smith high street chain)
Help for Heroes (charity, non-core supplier)
Condé Nast (magazine publisher, supplier)
Ferrero (chocolate manufacturer, supplier)
Lonely Planet (guidebook group, supplier)
British Land (landlord)
M&G, LandSec, NewRiver REIT (other landlords mentioned)
A spokesperson for British Land (quoted)
One card maker (anonymous supplier, quoted)
Another supplier (anonymous, quoted)
One landlord (anonymous, quoted)
A TG Jones spokesperson (quoted)
Sources: The Guardian
