British Land criticises TGJones’ ‘unacceptable’ and ‘unfair’ restructuring proposals

The high street chain, formerly named WHSmith, set out proposals last month that involve the closure of up to 150 branches and hundreds of job losses.

At the time, TGJones said: “The plan is an essential part of the company’s turnaround and will support further investment in stores over the long term. This decision has not been taken lightly.” 

It also added that the name change has “negatively impacted consumer awareness”, though the “proposition has improved”.

Modella Capital, TGJones’ owners, said the company could collapse into insolvency by summer if the plans aren’t approved.

In a statement to Sky News, British Land called Modella’s restructuring plans “fundamentally unfair” and warned it would bring steep rent cuts on owners, even on profitable stores.

It continued: “We recognise the challenging conditions facing many retailers and always seek to support customers who genuinely need it. However, the scale and structure of Modella’s restructuring plan for TGJones are unacceptable.

“As a creditor, we will not support proposals we consider fundamentally unfair, with deep rent cuts – even on profitable stores – placing a disproportionate share of the restructuring burden onto property owners.”

The property group has called on law firm Hogan Lovells to challenge the plans, with concessions from Modella a potential next step.

A TGJones spokesperson then issued a lengthy statement to the publication, saying it was “aware of concerns raised by a small number of landlords in connection with the restructuring plan”, but doubled down that the proposals “leave landlords no worse off than the alternative”.

It added: “Modella Capital is making more than £35m of financial contributions to support this restructuring.

“Any suggestion that the plan amounts to a transfer of value to the shareholder at landlords’ expense is completely incorrect.”

“The restructuring plan is vital to the survival of this 234-year-old business, along with the preservation of thousands of jobs.

“We remain open to constructive engagement with all creditors and urge them to consider the Plan on its merits.”

Modella also announced this week that it plans to cut rent and jobs across footwear retailer Wynsors World of Shoes. It also purchased Flying Tiger Copenhagen at the end of May.