Revealed: owner of former WH Smith stores is charging fee to use fictitious ‘family’ brand
Summary
The investment company Modella Capital, which owns the former WH Smith high street stores now called TG Jones, is charging licence fees for the use of the new brand name. The company is facing financial troubles, with plans to close stores and restructure due to falling sales and cash flow issues.Key Facts
- Modella Capital bought the former WH Smith high street stores for £76 million last year.
- The stores were rebranded to TG Jones to separate them from WH Smith stores still owned by the original company.
- TG Jones pays 1.03% of its monthly net revenue to Modella as licensing fees for using the TG Jones name.
- The licence fee could increase to 15% if a proposed restructuring plan is approved.
- Modella is owed £2.9 million in unpaid royalty fees since last June.
- Creditors and suppliers are concerned because TG Jones has delayed payments and stopped paying some business rates.
- Sales dropped by 12% after the rebranding from WH Smith to TG Jones.
- TG Jones warned it might have to enter administration if creditors do not approve the restructuring plan.
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