Key Takeaways
- • Modella Capital acquired WH Smith's High Street stores for £40 million in 2025, inheriting assets described as severely under-invested with non-functional lifts, escalators, missing ceiling tiles, and damaged carpets, according to the new operator.
- • TG Jones (the rebranded entity now operating the former WH Smith High Street portfolio under Modella ownership) plans to close up to 150 of its remaining 450 stores as part of a restructuring strategy that includes rent reductions at surviving locations.
- • Modella's retail track record has deteriorated sharply, with two portfolio companies—Claire's Accessories and The Original Factory Shop—collapsing into administration in 2026, resulting in approximately 2,500 job losses within months of acquisition.
- • WH Smith's former management defended the sale process, stating that all bidders had full access to operational and financial information before purchase, suggesting Modella proceeded with deal execution despite visibility into asset condition.
- • The TG Jones rebranding and subsequent operational challenges raise questions about Modella's retail expertise and the sustainability of the £40 million investment, particularly given accumulated closures and the costs of the failed rebrand strategy.
Summary
WH Smith's High Street store portfolio, sold to private equity firm Modella Capital for £40 million in 2025, has been characterized as structurally and operationally deficient by the new operator. Alex Willson, chief executive of TG Jones (the rebranded holding entity), stated upon assuming leadership in April 2026 that stores exhibited "almost completely broken" conditions, including non-functional lifts and escalators, missing ceiling tiles, threadbare carpets with holes, and absent lightbulbs. Willson attributed these conditions to "huge scale of under-investment over many years," though he maintained that turnaround remains feasible.
The allegations carry particular weight given Modella's deteriorating operational performance across its retail portfolio. In 2026 alone, the group has overseen the administration of Claire's Accessories and The Original Factory Shop, resulting in nearly 2,500 job losses. These collapses occurred within months of Modella's acquisition, raising material questions about the group's retail operational competency and capital allocation discipline.
Modella's strategy for TG Jones involves aggressive restructuring: the group plans to close up to 150 of the remaining 450 stores while simultaneously reducing rents at surviving locations. This approach signals acknowledgment of underlying operational and commercial challenges within the portfolio, though it also indicates potential write-downs against the original £40 million investment. Additionally, Modella continues to charge TG Jones fees for use of the rebranded name—a cost that observers have criticized given the rebranding's failure to revive commercial performance.
WH Smith's legacy management defended the transaction process, indicating that prospective bidders, including Modella, maintained full access to operational data and asset condition information prior to purchase completion. This disclosure suggests Modella proceeded despite documented awareness of significant deferred maintenance and operational deficiencies. The transaction reflects broader challenges within private equity-backed retail consolidation, where financial engineering and portfolio cost-cutting strategies may misalign with underlying asset quality and turnaround feasibility in the retail sector.
The allegations carry particular weight given Modella's deteriorating operational performance across its retail portfolio. In 2026 alone, the group has overseen the administration of Claire's Accessories and The Original Factory Shop, resulting in nearly 2,500 job losses. These collapses occurred within months of Modella's acquisition, raising material questions about the group's retail operational competency and capital allocation discipline.
Modella's strategy for TG Jones involves aggressive restructuring: the group plans to close up to 150 of the remaining 450 stores while simultaneously reducing rents at surviving locations. This approach signals acknowledgment of underlying operational and commercial challenges within the portfolio, though it also indicates potential write-downs against the original £40 million investment. Additionally, Modella continues to charge TG Jones fees for use of the rebranded name—a cost that observers have criticized given the rebranding's failure to revive commercial performance.
WH Smith's legacy management defended the transaction process, indicating that prospective bidders, including Modella, maintained full access to operational data and asset condition information prior to purchase completion. This disclosure suggests Modella proceeded despite documented awareness of significant deferred maintenance and operational deficiencies. The transaction reflects broader challenges within private equity-backed retail consolidation, where financial engineering and portfolio cost-cutting strategies may misalign with underlying asset quality and turnaround feasibility in the retail sector.
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