Leading UK commercial landlords including British Land, Landsec, M&G and NewRiver have launched a legal challenge to the restructuring proposals put forward for TG Jones, the rebranded former WH Smith high street chain.
Hogan Lovells is providing legal advice on the challenge to the plans proposed by Modella, the private equity owner of the retail stores.
Modella is proposing rent reductions and extended payment holidays across the 451-store estate. Landlords for more than 120 stores would receive no rent payments for a three-year period, while hundreds of other properties would see rent reductions ranging from 15% to 75%.
A British Land spokesperson told Sky News: "The scale and structure of Modella's restructuring plan for TG Jones 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 High Court approval hearing is scheduled for 29 June.
Real Estate: UK, the commercial property trade body, said: "Several landlord creditors affected by the restructuring plan's proposals are seeking to improve the plan and make it fairer to the affected parties.
"We were pleased that the judge signalled an expectation that TG Jones should engage further with landlords and we hope and expect to see such engagement from the company as a result."
Specialist retail and consumer investment boutique Modella acquired part of the TG Jones business last June.
A spokesperson for TG Jones said at time of the launch of the restructuring that the plan would "make the business fit for the future" and would be an "essential part of the company’s turnaround". "[It] will support further investment in stores over the long term," they added.
Factors such as "highly challenging trading conditions over the past year", "weak consumer spending and cost-of-living pressures" were listed as reasons for the implementation of the plan, alongside "rising operating costs as a direct result of government policy and recent geopolitical events".
Reports of a potential restructuring plan surfaced in March, with The Independent reporting that TG Jones was considering a move to close around 80 stores, more than 10% of its total UK retail portfolio.
WH Smith divested around 480 high street stores in a £76 million deal. The legacy retailer retained its stores in transport hubs, such as airports and train stations that were more profitable, along with the brand name.
The high street division had an annual turnover of over £400 million and earnings before interest, taxes, depreciation, and amortisation of £41.2 million according to its full year results for 2024.
Modella Capital confirmed in January that it had placed another high street staple, Claire's, into administration due to low Christmas trading, with the the private equity group having bought the retailer out of administration in August.