Former WH Smith's small suppliers to lose at least half of debts in rescue plan
Guardian AU Business
•Wed, 24 Jun 2026 16:59:10 GMT
📰 What Happened
Small suppliers to the former WH Smith chain — now rebranded as TG Jones after its acquisition by private equity firm Modella Capital — face losing at least half of the money owed to them under a proposed restructuring plan. The revived high-street retailer, which operates 450 stores, has warned that it will likely have to call in administrators if creditors do not approve the amended restructuring plan, which was put to votes on Wednesday and Thursday, June 24-25, 2026. The plan requires approval from just one class of creditor and subsequent approval by a High Court judge on Monday to proceed.
Under the proposed terms, dozens of "exit contract" suppliers — companies that TG Jones does not intend to work with in the future, including toy makers and greeting card companies — are expected to have their debts entirely wiped out. They would retain only the right to a share of future profits above a certain threshold in three years' time, assuming the loss-making retailer returns to profitability. Other classes of creditors, including landlords and core suppliers, are also being asked to accept significant haircuts on what they are owed. The aggressive restructuring reflects the financial distress of the business since its private equity acquisition and rebranding.
🔍 The Backstory
WH Smith was one of the UK's most iconic high-street retailers, with a history dating back to 1792. The company operated hundreds of stores selling books, stationery, newspapers, and greeting cards from locations on virtually every British high street and in most major airports and train stations. In 2025, the chain was acquired by Modella Capital, a private equity firm, and rebranded as TG Jones — a move that was met with widespread nostalgia and criticism as a much-loved British institution was renamed. The acquisition was structured as a leveraged buyout, loading the business with debt. Since then, TG Jones has struggled with declining footfall on British high streets, competition from online retailers, and the burden of its debt service costs. The restructuring plan is effectively a Company Voluntary Arrangement (CVA) or similar insolvency proceeding that allows the retailer to shed costs and obligations while continuing to trade. Small, unsecured suppliers are typically the hardest hit in such restructurings, as they lack the negotiating power of larger creditors.
🎯 Why It Matters
The potential losses for small suppliers highlight the human cost of private equity ownership on the broader business ecosystem, particularly for small businesses that depend on steady payments from larger customers. The restructuring could put dozens of small UK suppliers — many of them family-owned greeting card publishers, toy manufacturers, and stationery makers — at significant financial risk. The case also illustrates the controversial mechanics of modern UK insolvency law, where a restructuring plan can be imposed on dissenting creditor classes if one class approves, raising questions about the fairness of the process for small creditors with limited bargaining power.
Small suppliers to the former WH Smith chain — now rebranded as TG Jones after its acquisition by private equity firm Modella Capital — face losing at least half of the money owed to them under a proposed restructuring plan. The revived high-street retailer, which operates 450 stores, has warned that it will likely have to call in administrators if creditors do not approve the amended restructuring plan, which was put to votes on Wednesday and Thursday, June 24-25, 2026. The plan requires approval from just one class of creditor and subsequent approval by a High Court judge on Monday to proceed.
Under the proposed terms, dozens of "exit contract" suppliers — companies that TG Jones does not intend to work with in the future, including toy makers and greeting card companies — are expected to have their debts entirely wiped out. They would retain only the right to a share of future profits above a certain threshold in three years' time, assuming the loss-making retailer returns to profitability. Other classes of creditors, including landlords and core suppliers, are also being asked to accept significant haircuts on what they are owed. The aggressive restructuring reflects the financial distress of the business since its private equity acquisition and rebranding.
WH Smith was one of the UK's most iconic high-street retailers, with a history dating back to 1792. The company operated hundreds of stores selling books, stationery, newspapers, and greeting cards from locations on virtually every British high street and in most major airports and train stations. In 2025, the chain was acquired by Modella Capital, a private equity firm, and rebranded as TG Jones — a move that was met with widespread nostalgia and criticism as a much-loved British institution was renamed. The acquisition was structured as a leveraged buyout, loading the business with debt. Since then, TG Jones has struggled with declining footfall on British high streets, competition from online retailers, and the burden of its debt service costs. The restructuring plan is effectively a Company Voluntary Arrangement (CVA) or similar insolvency proceeding that allows the retailer to shed costs and obligations while continuing to trade. Small, unsecured suppliers are typically the hardest hit in such restructurings, as they lack the negotiating power of larger creditors.
The potential losses for small suppliers highlight the human cost of private equity ownership on the broader business ecosystem, particularly for small businesses that depend on steady payments from larger customers. The restructuring could put dozens of small UK suppliers — many of them family-owned greeting card publishers, toy manufacturers, and stationery makers — at significant financial risk. The case also illustrates the controversial mechanics of modern UK insolvency law, where a restructuring plan can be imposed on dissenting creditor classes if one class approves, raising questions about the fairness of the process for small creditors with limited bargaining power.