The owner of WHSmith’s former high street chain risks a wave of fresh criticism as the retailer seeks to postpone repayments owed to major suppliers.
Modella Capital has informed several big brands that they could face a six-month wait to recoup any money owed from the TGJones as part of its proposed financial restructuring plan, The Telegraph reported.
Suppliers such as Condé Nast, Ferrero and Lonely Planet were told that once the repayment freeze ends, they will be repaid in equal monthly instalments that could last for more than a year.
The terms of Modella’s restructuring plan for TGJones risks leaving its already exhausted stores with greater supply issues.
It comes after the investment firm was forced to sweeten the terms of its proposals after facing a backlash from landlords.
Modella is now planning to shut up to 150 stores, impose zero rents on 120 stores and cut rents of other stores by between 15% and 75%.
Eligible landlords have been told they will share 50% of any “upside” after a three years if the total turnover of the business reaches £40m, compared to a 25% cut of £47.5m.
The plan is subject to a High Court decision, which is scheduled for June 29. Creditors will vote on whether to back the restructure or not.
One creditor told Sky News that the amended profit share did “not go far enough”.
“It presupposes that the company will have sufficient cash in three years to pay an upside at all, while the business will still have to repay its debts,” they said.
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