Reading: Tg Jones creditors told Post Office leases could end on 56 days’ notice

Tg Jones creditors told Post Office leases could end on 56 days’ notice

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has told creditors it wants to change contracts so outlets inside stores that lose their leases can be closed on 56 days' notice, a sharp cut from the current six-month period, if its restructuring plan is approved.

The move could affect as many as 60 of TG Jones's 180 post offices, and comes as creditors prepare to vote next month on a plan that could see up to 150 of the retailer's 450 stores shut. Eight stores are set to close whatever happens, and seven of them contain Post Offices, in East Ham, Waltham Cross in Hertfordshire, Torquay in Devon, Hull, Ayr, Middleton in Greater Manchester and Solihull in the West Midlands.

The proposed changes would last for the three-year restructuring period through June 2029. During that time, other rights to compensation would also be waived for stores affected by the plan. The Post Office would instead receive a payment equal to 170% of the estimated profits from the closure of a site, with a floor of £500.

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Modella, which bought the former WH Smith high street chain last year and renamed it TG Jones, has already said the survival of the 234-year-old business is its imperative as it faces weak consumer spending and higher operating costs. It has also said the forced name change from WH Smith has hurt trade and that store closures and job cuts are likely.

of the said the company risked turning areas into postal deserts in a modern world and said workers and communities needed cast-iron guarantees. He said the union had warned governments of all colours for nearly 35 years that outsourcing important social services like the Post Office to companies would put shareholders before the communities they serve, adding that the result was likely to be more community and Crown post office closures.

The restructuring plan is tied to rent cuts across dozens of outlets, and landlords are expected to recall leases rather than accept the lower rents, creating the legal opening for closures inside stores that lose their sites. After June 2029, the Post Office's rights will return to normal.

For TG Jones, the question next month is not whether pressure is building but whether creditors will let Modella move fast enough to cut its liabilities before the chain’s weaker stores force the issue anyway.

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