Concerns are growing that numerous Post Office branches might vanish from Britain’s high streets. This follows the new owner’s decision to simplify the process of closing branches located within WH Smith’s former retail locations.
After WH Smith’s high street operations were acquired by private equity firm Modella last year, they were rebranded as TG Jones. Currently, TG Jones manages 180 Post Office branches across the UK.
However, under new restructuring plans, as many as 60 of these branches could face closure.
The restructuring strategy involves significant rent reductions for many of its properties. Landlords, faced with lower rent offers, are anticipated to decline and potentially reclaim their properties.
This move could lead to the shutdown of up to 150 out of TG Jones’s 450 stores nationwide, putting thousands of jobs at risk.
According to documents shared with creditors, Modella is also aiming to reduce the notice period required for closing Post Office branches in affected stores. If the restructuring plan proceeds, the notice period could be cut from six months to just 56 days.
Creditors are due to vote on the proposals next month.
Eight closures have already been confirmed, seven of them containing Post Office counters.
TG Jones, the chain created after private equity firm Modella bought WH Smith’s high street business last year, currently operates 180 Post Office branches
The affected locations are East Ham, Waltham Cross, Torquay, Hull, Ayr, Middleton, and Solihull.
Where a Post Office counter closes, the service would either need to relocate to another nearby premises or disappear from the area altogether.
The Communications Workers Union (CWU) warned the move risked leaving some communities cut off from vital postal services.
Mole Meade, a member of the CWU executive council, said areas losing branches would ‘become postal deserts in a modern world’.
The union has repeatedly raised concerns about the future of the business since Modella’s takeover, previously demanding ‘cast-iron guarantees’ over workers’ terms and conditions amid fears the firm could be ‘carpet baggers looking to asset strip it’.
Meade said this week: ‘We have been warning governments of all colours for nearly 35 years that outsourcing important social services like the Post Office to companies will put shareholders before communities we serve.
‘All they will do is end up closing down community and crown post offices.’
According to restructuring documents seen by the Guardian, other compensation rights linked to branch closures would also be waived temporarily.
Instead, the Post Office would receive a payment worth 170 per cent of the estimated profits generated from the closure of a branch, such as stock sales, with a guaranteed minimum payout of £500.
The revised notice terms and compensation arrangements would remain in force until June 2029, after which existing Post Office rights would revert to normal.
Last week, Modella said saving the ‘iconic 234-year-old business’ remained its priority as the retailer battled weak consumer demand and soaring costs.
The firm also claimed the forced rebrand from WH Smith to TG Jones had damaged trading performance, increasing the likelihood of store closures and redundancies.
The plans centre on sharp rent reductions across large parts of the estate, with landlords expected to reject the lower payments and instead reclaim their properties
Modella said: ‘The restructuring plan is designed to protect the substantial core of the store estate and create a stronger, more sustainable business that can continue to serve customers for years to come.
‘We are extremely grateful to the many stakeholders who have pledged their support, including the Post Office and Toys R Us.’
The company had previously promised landlords it would turn TG Jones into the ‘hub of the high street’, expanding to 500 stores, combining postal and banking services with toys, books and educational products.
It is understood that Modella hopes to relocate some displaced Post Office branches into other businesses within its portfolio, including Hobbycraft stores.
A Post Office spokesperson said: ‘We fully recognise the challenging trading conditions that TG Jones and many other high street retailers are facing at the moment.
‘It’s regrettable that following the restructuring plan announcement by TG Jones on 7 May, a small number of Post Office branches inside TG Jones stores will close in the coming months.
‘We are working hard to find locations nearby to continue offering Post Office services.
‘We have a longstanding partnership with TG Jones, and we know that post offices drive significant footfall to the high street.
‘We will continue to work closely with TG Jones to understand what impact the restructuring plan could have on other stores that host post offices and are potentially at risk of closure.
‘We will also continue to support the many branches inside TG Jones stores not impacted by this announcement, serving thousands of customers every week.’
The state-owned Post Office, still facing fallout from the Horizon IT scandal, announced plans to close more than 100 branches in late 2024.
WH Smith’s travel division, including shops in airports, railway stations, and hospitals, was excluded from the Modella takeover and remains under the ownership of the listed parent company.
Daily Mail has approached Modella and the Post Office for comment.
