UK Restructuring Plan Puts Up to 60 Post Office Counters at Risk

Modella, the private equity owner of TG Jones, is seeking to change its contracts with the Post Office in a move that could make it easier to close Post Office counters inside its stores, with as many as 60 potentially affected. The proposal is linked to a wider restructuring plan that creditors are due to vote on next month.

If approved, outlets that lose their store leases could be shut with 56 days’ notice rather than the current six-month period. The changes could reduce access to postal and related services in some communities across the United Kingdom.

TG Jones is the rebranded high street chain previously owned by WH Smith. Under Modella’s plan, rents would be cut on dozens of outlets, and landlords are expected in some cases to take back leases rather than accept lower payments. Modella has said the restructuring is aimed at protecting the core of the store estate amid weak consumer spending and rising operating costs.

Modella has written to creditors saying the contract change would apply where a store loses its lease under the restructuring. The shorter notice period would apply for three years, running to June 2029, after which the Post Office’s rights would return to normal.

Store closures and local service disruption

The restructuring plan could lead to the closure of up to 150 of TG Jones’s 450 stores, according to the information circulated to creditors. Eight store closures are confirmed, and seven of those sites currently include Post Office counters: East Ham, Waltham Cross, Torquay, Hull, Ayr, Middleton, and Solihull.

If a store housing a Post Office counter closes, the Post Office would need to find another local site to keep services running or stop offering those services in that area. The prospect of closures drew criticism from the Communications Workers Union, which warned that affected communities could lose convenient access to essential services.

Compensation terms and Post Office response

Documents sent to creditors also indicate that some compensation rights would be waived for stores affected by the restructuring. Instead, the Post Office would be offered a payment equivalent to 170% of the estimated profits from a closure, with a minimum payment of £500.

The Post Office has indicated support for the restructuring plan and said it is working to find alternative nearby locations where branches inside TG Jones stores close. It is also exploring whether some branches could be rehoused within other Modella-owned businesses, including Hobbycraft.

Creditors are expected to vote next month on whether to approve the restructuring plan, which will determine whether the contract changes and accelerated closure process can take effect.