“It’s just the same.” Six months on from the sale of WH Smith’s high street business, the name above the door may have changed to TG Jones, but many shoppers have not noticed a splurge of investment or change.
“The layout is the same and what they are selling is the same,” says Gillian Parsons as she exits TG Jones on a busy high street in the market town of Hitchin, Hertfordshire, where a steady flow of visitors are picking up cards, wrapping paper and the odd present in the week before Christmas.
“Even the branding is similar,” says Jazz Minhas, another shopper. Others had not even noticed the name above the door had changed – such was the similarity of the signage, which sticks to a similar blue.
However, shoppers are not really feeling the same vibe as under the 233-year-old WH Smith brand. “I loved Smiths. I used to say to my husband: ‘I’m just popping down to Smiths’ but I’ll never be able to say: ‘I’m popping to Jones’s,’” says Parsons, who admits she is not so regular a visitor as she used to be, picking up books elsewhere and getting her newspapers delivered.
The private equity company Modella Capital, the owner of Hobbycraft, the UK arm of Claire’s and The Original Factory Shop, bought WH Smith’s high street arm in June for up to £40m, half of which is dependent on trading up until August next year. The price was cut by £12m at the last moment after “a period of softer trading”.
The business is now totally separate from the travel retail arm, which retained the WH Smith name, is listed on the London Stock Exchange and continues to trade in airports, stations and hospitals. Its share price recently dived after accounting problems at its US operation.
In a recent presentation to landlords seen by the Guardian, Modella promised to invest in expanding TG Jones to be the “hub of the high street” with 500 outlets that would combine post office and banking services with learning, play and reading products.
The plan appears to be to expand into new locations, with some parts of the UK, such as north-east England and the East Midlands sparsely covered with stores compared with the south.
Visitors are to be tempted in with refits. However, only 14 of the group’s 456 stores so far have been revamped, with 10 more definitely planned, according to the presentation.
Store updates are also set to include more post offices, on top of four added since the deal, and branded sections from Modella’s other businesses Claire’s and Hobbycraft, and its partner Toys R Us.
Toys R Us, for example, is in 115 TG Jones stores currently, according to the presentation, and it expects to increase that to more than 250 – the same number of stores set to host a Hobbycraft section by 2027.
It may have gone unnoticed in Hitchin, but there are small changes creeping into the former WH Smith outlets, including a small new section dedicated to goods from Hobbycraft and Toys R Us and a section for “DIY essentials”.
However, since the deal was first announced in March, 24 stores have closed – including nine since the deal was completed in June – as TG Jones has continued a programme of closures already under way by WH Smith.
Shoppers say they will need more changes if they are to be tempted to spend more and keep TG Jones afloat amid rising costs on the high street.
“It’s not what it was when you could buy records and toys and it was slick. It doesn’t really know what it is. I’d like to see more arts stuff and stationery. Books and toys everyone can get cheaper elsewhere,” Jon Wright says.
Shoppers admit they are more likely to buy many of the items sold in TG Jones online or at rivals including The Range, Poundland, Waterstones or big supermarkets – where they can get cheaper prices or more choice.
“It’s more convenient to shop at the supermarket,” say sisters Tracy Ward and Lisa Bierton.
“I tend to go to cheaper shops for cards,” Ward says. “People don’t tend to get cards as often, as a stamp costs more than the card these days.”
Trading on UK high streets has been tough in the run-up to Christmas, when WH Smith used to make the majority of its profits, with shoppers reining in the present buying and sending fewer cards as the energy and grocery bills remain high and fears about tax rises and other factors such as the war in Ukraine and the economic outlook prompt households to hold on to spare cash.
Earlier this month, Card Factory delivered an unwelcome early Christmas surprise for investors by issuing a shock profit warning during the cut-price greetings card retailer’s peak trading period, which sent shares plunging by more than a fifth.
One retail property expert said he believed Modella would radically restructure TG Jones in July next year once a 12-month prohibition on such steps agreed as part of the deal with WH Smith comes to an end.
He said such a move would be necessary because a large estate, with many sites on the borderline of profitability, risked “being eaten from the tail” as investments in key stores were offset by problems in the wider estate.
“They can dominate the market in some smaller areas but in bigger malls they are up against the likes of Miniso [on toys] and The Works on stationery and books.”
Another retail insider who knows the business well said TG Jones might well have been helped by changes to business rates in the budget that helped keep a lid on costs for many high street outlets but said store closures were likely, with as many as 100 at risk.
“It’s inevitable that the shape of that business will change,” the source said, as retail profits are under pressure and the cost of refurbishing ageing outlets is high and without a guaranteed payback.
TG Jones and Modella were contacted for comment.
The chain’s previous owner, WH Smith, may have responded to heavy criticism about its flooring and tatty shelves with a round of investment in recent years but many outlets still look out of date after a long period of cost-cutting.
TG Jones in Stevenage, for example, appears almost identical to its WH Smith days, suggesting it is among a list of sites under threat.
“Back in the day I used to shop in WH Smith,” says Wayne Garland, 49, standing outside the store, which sits in a struggling outdoor mall where there are a number of empty units. “But now it’s too expensive when I can go to Poundland and buy 10 pens for £1. With the cost of living crisis, I’m looking for bargains bottom line.”
Marion and Craig Herbert agree there are now cheaper and handier alternatives. “We do quite a bit online now. The world has changed,” Marion says.
