Companies That You Expect to Disappear Soon

[BuhSnarf]

They bought WHS high street for around £10m.
The first thing to remember is TGJones is not Modella, so they are insulated from the stores failing.
The second thing is that the fictitious name "TGJones" is actually owned by Modella - and they current allow the old stores to use it for Royalties (they've apparently accrued around £3m in royalties so far)
This money is not paid to Modella, it just stacks up as debt.
When the company (likely) folds then they are already listed as a prioritised creditor so they recoup back that little stack of debt before any other creditor.

They may also (although I'm not sure) dump debt on to chains they buy similar to what the Issa brothers did with ASDA/EG.

I believe they also impose other 'management' fees to TGJones. So, essentially Modella are quids in whether they succeed or fail. They wouldn't keep buying these chains to let them fail if it wasn't profitable for them.

 

[cactustwirly]

They bought WHS high street for around £10m.
The first thing to remember is TGJones is not Modella, so they are insulated from the stores failing.
The second thing is that the fictitious name "TGJones" is actually owned by Modella - and they current allow the old stores to use it for Royalties (they've apparently accrued around £3m in royalties so far)
This money is not paid to Modella, it just stacks up as debt.
When the company (likely) folds then they are already listed as a prioritised creditor so they recoup back that little stack of debt before any other creditor.

They may also (although I'm not sure) dump debt on to chains they buy similar to what the Issa brothers did with ASDA/EG.

I believe they also impose other 'management' fees to TGJones. So, essentially Modella are quids in whether they succeed or fail. They wouldn't keep buying these chains to let them fail if it wasn't profitable for them.

You'd have thought they'd have a plan for the stores? Turn them into mini Hobbycraft for the city centre locations or refresh the selling range for the modern day.
Ie more focus on stationary and books etc

 

[BuhSnarf]

You'd have thought they'd have a plan for the stores? Turn them into mini Hobbycraft for the city centre locations or refresh the selling range for the modern day.
Ie more focus on stationary and books etc

Having a plan costs money! I am, personally, surprised they haven't introduced more Hobbycraft product in to the stores as with the current craft boom and the recent reduction in Hobbycraft stores I'd have thought it'd do well. But potentially there are back office system issues with getting the stock across / ranged. Interestingly it has been noted that some TGJs are now stocking cooking supplies (trays/spoons etc.) for back to uni, which is possibly old Original Factory Shop stock or at least links with their old suppliers.

 

[Bletchleyite]

You'd have thought they'd have a plan for the stores? Turn them into mini Hobbycraft for the city centre locations or refresh the selling range for the modern day.
Ie more focus on stationary and books etc

It just appears to be classic asset stripping, sadly. I did have a fair bit of hope that they might look to their other brands and update the stores with a new range of other things like Hobbycraft products.

The name says it all though, it's just bare minimum, someone thought of that in 5 minutes in the brainstorming session. I'd expected a wholly new, stronger brand - perhaps "Newscraft" might have worked if they were taking on some of the Hobbycraft product range? And maybe some more Waterstones style marketing of books etc? It really doesn't seem hard to come up with ideas for this sort of store.

 

[Tetchytyke]

Looking into them I'd love to think that Modella are just smarter than me and they have some genius plan but I see no conventional commercial opportunity so my assumption is either they are nuts/foolish (possible; there's certainly history of the city throwing money at lucky foolish people who scrub up well but it doesn't feel likely in this case) or there's some sort of regulatory arbitrage or quid pro quo thing going on.

There is a lot of money to be made in sucking the last few drops of blood out of a dying company. You buy a distressed company for a pittance and you burden the company with administration fees or management charges. You asset-strip what you can. And then, when it inevitably goes bust, you've got your money but the costs fall on other people. It's about as low-risk as you could imagine. If it works you're quids in but if it doesn't you've still made a bit of money and everyone else gets to take the haircut.

There's a lot of focus on the welfare benefit bill. I mention this because it is the National Insurance Fund which pays out employees' unpaid wages and unpaid redundancy money when an employer can't do so. We think of NI as paying towards our pensions but instead it is being used to pay off private equity debts.

Jamie Constable, who owns Modella Capital, is not an idiot. He is very wealthy. He's been doing this for a very long time. He owned Little Chef (bankrupt), Tie Rack (bankrupt), the payday lender Morses Club (bankrupt), Claire's Accessories (bankrupt), Ted Baker (bankrupt), and the Original Factory Shop (bankrupt). He has TG Jones and Wynsors Shoes and both of those are circling the drain.

He's also just bought Flying Tiger, so I'm now going to add that to the list of "companies you expect to disappear soon" too.

 

[Peter Sarf]

There is a lot of money to be made in sucking the last few drops of blood out of a dying company. You buy a distressed company for a pittance and you burden the company with administration fees or management charges. You asset-strip what you can. And then, when it inevitably goes bust, you've got your money but the costs fall on other people. It's about as low-risk as you could imagine. If it works you're quids in but if it doesn't you've still made a bit of money and everyone else gets to take the haircut.

There's a lot of focus on the welfare benefit bill. I mention this because it is the National Insurance Fund which pays out employees' unpaid wages and unpaid redundancy money when an employer can't do so. We think of NI as paying towards our pensions but instead it is being used to pay off private equity debts.

Jamie Constable, who owns Modella Capital, is not an idiot. He is very wealthy. He's been doing this for a very long time. He owned Little Chef (bankrupt), Tie Rack (bankrupt), the payday lender Morses Club (bankrupt), Claire's Accessories (bankrupt), Ted Baker (bankrupt), and the Original Factory Shop (bankrupt). He has TG Jones and Wynsors Shoes and both of those are circling the drain.

He's also just bought Flying Tiger, so I'm now going to add that to the list of "companies you expect to disappear soon" too.

Thanks for the list. I know Modella is about sucking the last bit of blood out and leaving most of the debt for others to cope with but the list is longer than I recall !.

For those making suggestions re TG Jones improvements FORGET IT. The whole point is to spend as little actual money as possible - hence the very plain and minimalist sign over the windows. All Modella need to do is let TG Jones die while it still has more than £10m worth of assets, slowly reducing with any actual profit they take out of TG Jones. When TG Jones finally goes bust Modella will be at the front of the creditors queue and they will have hung extra debt on it (management fees etc etc). All they need is £10m (or less as time goes by) worth of realisable assets.

Cynical is an understatement. Furthermore WH Smith will have got out of the costs of closing the high street stores, paying peoples redundancy and ongoing pensions (if a company pension scheme). WH Smith could afford to PAY Modella to take over the high street stores !.

EDIT
I ought to say this is my understanding of how firms like Modella operate. But I am not an expert on these things so the detail might be a bit off, however this is how they generally operate.

 

[WesternLancer]

Thanks for the list. I know Modella is about sucking the last bit of blood out and leaving most of the debt for others to cope with but the list is longer than I recall !.

For those making suggestions re TG Jones improvements FORGET IT. The whole point is to spend as little actual money as possible - hence the very plain and minimalist sign over the windows. All Modella need to do is let TG Jones die while it still has more than £10m worth of assets, slowly reducing with any actual profit they take out of TG Jones. When TG Jones finally goes bust Modella will be at the front of the creditors queue and they will have hung extra debt on it (management fees etc etc). All they need is £10m (or less as time goes by) worth of realisable assets.

Cynical is an understatement. Furthermore WH Smith will have got out of the costs of closing the high street stores, paying peoples redundancy and ongoing pensions (if a company pension scheme). WH Smith could afford to PAY Modella to take over the high street stores !.

EDIT
I ought to say this is my understanding of how firms like Modella operate. But I am not an expert on these things so the detail might be a bit off, however this is how they generally operate.

Thanks - informative to read this and other comments on the model eg post from @Tetchytyke

A question that occurs to me is given the track record with the previous retailers listed, why would any supplier of stock to the shops extend any credit line to them (if I am using the correct term - ie by which I mean supply any stock to sell to any business owned by Modella without payment up front before delivery)?

 

[Peter Sarf]

Thanks - informative to read this and other comments on the model eg post from @Tetchytyke

A question that occurs to me is given the track record with the previous retailers listed, why would any supplier of stock to the shops extend any credit line to them (if I am using the correct term - ie by which I mean supply any stock to sell to any business owned by Modella without payment up front before delivery)?

I wonder that too. Some of the dying companies might already have reached that stage of credit worthy-ness before Modella take over. In the case of WH Smith, off loading the high street stores to Modella might have dome wonders for WH Smiths credit worthy-ness going forward.

 

[Mcr Warrior]

Didn't someone mention upthread that many of the magazines displayed at TGJ are essentially there on a 'sale or return' basis?

 

[SuspectUsual]

Didn't someone mention upthread that many of the magazines displayed at TGJ are essentially there on a 'sale or return' basis?

Virtually all of them are.

 

[35B]

Thanks - informative to read this and other comments on the model eg post from @Tetchytyke

A question that occurs to me is given the track record with the previous retailers listed, why would any supplier of stock to the shops extend any credit line to them (if I am using the correct term - ie by which I mean supply any stock to sell to any business owned by Modella without payment up front before delivery)?

I suggest two reasons. One is that they can get credit insurance (more than a few firms have finally gone down the plughole when that's been withdrawn). Second is that if they pull the trigger, they crystallise their own risk of losing the client, and make it difficult to get back in if the customer does survive.

 

[SuspectUsual]

I suggest two reasons. One is that they can get credit insurance (more than a few firms have finally gone down the plughole when that's been withdrawn). Second is that if they pull the trigger, they crystallise their own risk of losing the client, and make it difficult to get back in if the customer does survive.

Loss of credit insurance at key suppliers was what finally did for Wilko's

[EDIT]

From what I was told by someone who was well-informed, the particular issue was the suppliers of a lot of their own brand products couldn't get credit insurance because the insurers were worried that there would be no viable alternative if Wilko's collapsed and the supplier was sitting on Wilko-branded stock other than jobbing it off at the normal 10% - 20% level

 

[MarkyT]

Didn't someone mention upthread that many of the magazines displayed at TGJ are essentially there on a 'sale or return' basis?

I believe that's typical in the business. They're probably delivered and collected by Smiths News, which demerged from WH Smith in 2006.

 

[WesternLancer]

Didn't someone mention upthread that many of the magazines displayed at TGJ are essentially there on a 'sale or return' basis?

I think this is a very long standing standard procedure for newspapers and magazines in newsagents / places that retail them

== Doublepost prevention - post automatically merged: 21 Sep 2026 ==

I suggest two reasons. One is that they can get credit insurance (more than a few firms have finally gone down the plughole when that's been withdrawn). Second is that if they pull the trigger, they crystallise their own risk of losing the client, and make it difficult to get back in if the customer does survive.

Thanks for the insight. Helpful to read.
Tho thinking about it, with a track record of the high street firms listed above ref Modella- it would seem pretty unlikely the customer is going to survive...

 

[Andyh82]

I think this is a very long standing standard procedure for newspapers and magazines in newsagents / places that retail them

This will be why you can never buy old newspapers and magazines in shops, whether that is TG Jones, Tesco or your local newsagent.

If they weren’t on sale or return you’d have bargain bins with old monthly magazines on sale.

In regards to TG Jones, they did do what people are saying at the one in Leeds - it’s got a Post Office, a Toys R Us, a Hobbycraft area and a small DIY sort of area, plus they’ve fixed all the lights. Presumably they realised that there isn’t any money to actually roll this out more widely.

 

[BuhSnarf]

I think this is a very long standing standard procedure for newspapers and magazines in newsagents / places that retail them

It is, virtually all magazines and books are on Sale or Return basis.

The biggest exception is "part work" type magazines which are usually on sale or return for the first 3-6 editions and then move to "firm sale" which is basically why newsagents will require you to order them and usually pay in advance, they then get put in a cabinet and only sold to that person.

In regards to TG Jones, they did do what people are saying at the one in Leeds - it’s got a Post Office, a Toys R Us, a Hobbycraft area and a small DIY sort of area, plus they’ve fixed all the lights. Presumably they realised that there isn’t any money to actually roll this out more widely.

It's possible also, that some of the profitable stores may be upgraded and potentially survive the cull only to then be sold as a going concern, making Modella some extra money. There is a big chunk of the WHS estate that really is past it's best and has been for a number of decades. It was always a burden around WHS' neck as there were way too many stores and way too many stores needing investment (the whole carpet saga!) This process could essentially lead to a smaller, sustainable chain going forwards for a new buyer...

 

[Egg Centric]

There is a lot of money to be made in sucking the last few drops of blood out of a dying company. You buy a distressed company for a pittance and you burden the company with administration fees or management charges. You asset-strip what you can. And then, when it inevitably goes bust, you've got your money but the costs fall on other people. It's about as low-risk as you could imagine. If it works you're quids in but if it doesn't you've still made a bit of money and everyone else gets to take the haircut.

There's a lot of focus on the welfare benefit bill. I mention this because it is the National Insurance Fund which pays out employees' unpaid wages and unpaid redundancy money when an employer can't do so. We think of NI as paying towards our pensions but instead it is being used to pay off private equity debts.

Jamie Constable, who owns Modella Capital, is not an idiot. He is very wealthy. He's been doing this for a very long time. He owned Little Chef (bankrupt), Tie Rack (bankrupt), the payday lender Morses Club (bankrupt), Claire's Accessories (bankrupt), Ted Baker (bankrupt), and the Original Factory Shop (bankrupt). He has TG Jones and Wynsors Shoes and both of those are circling the drain.

He's also just bought Flying Tiger, so I'm now going to add that to the list of "companies you expect to disappear soon" too.

So the second of my two options then (I've no idea if this is *technically* regulatory arbitrage but it's the kind of thing I meant). I've no problem with asset stripping per se - that's just efficiently moving resources around - but financially engineering the losses onto everyone while pocketing all the gains is the kind of thing that could make me vote for a supertax, it's morally benefit fraud on a grand scale.

I had a look at their careers website just now. Very telling that there aren't any senior roles or anything offering progression being advertised.

 

[johntea]

I noticed the local 'Three' mobile store in town was closed today for a refurb as Vodafone have bought them out so presumably they'll be either closing a lot of Three or a lot of Vodafone stores as they merge them together!

What did the marketing brains come up with for the exciting new brand name?

...VodafoneThree

 

[jon0844]

I noticed the local 'Three' mobile store in town was closed today for a refurb as Vodafone have bought them out so presumably they'll be either closing a lot of Three or a lot of Vodafone stores as they merge them together!

What did the marketing brains come up with for the exciting new brand name?

...VodafoneThree

I think now Vodafone has bought out Three's share, it will revert to Vodafone in time. VodafoneThree is not the public-facing brand though is it? Vodafone and Three still have their unique brands and marketing - for now.

When Everything Everywhere was formed (now just EE), Orange and T-Mobile remained, but any town centre that had a T-Mobile and Orange shop generally lost one as soon as one of the leases expired (in some cases, they might have kept the one that was in a better location and had a higher footfall etc).

I think we'll see the Three stores go and Vodafone ones remain, but perhaps Three have some stores in a better location and will change like EE. That doesn't mean we might not see a store selling both Vodafone and Three, but it would seem unlikely because I'm certain Three will be phased out and it would just create headaches for staff in one store having to deal with two unique systems for managing accounts (possibly three (not 'Three'!) as Vodafone still has two systems - one for consumers and one for small and medium enterprise customers).

I know from LinkedIn that an awful lot of people working for Three have left over the last six months or so, so I think it's very clear that even if Three remains it will become little more than an MVNO for Vodafone. There's a lot of work to merge the two networks together and the backhaul changes etc, so it's not going to happen overnight. I think there might actually be a roadmap published by VodafoneThree somewhere, although it could already be out of date because Vodafone opted to buy out Three which wasn't part of the original proposal (at least not officially - insiders expected this all along but regulators may not have approved it had this been stated).

 

[skyhigh]

I think we'll see the Three stores go and Vodafone ones remain

Already started happening. The 3 store in Harrogate has closed, with Vodafone now selling 3 products as well as Vodafone.

 

[gswindale]

Talk Talk don't appear to have been mentioned in this topic

TalkTalk races to sell consumer and broadband arms as administration looms

Customers and jobs ‘top priority’ as company closes in on deals with Opus Broadband and investment group Octopus

www.theguardian.com

TalkTalk is scrambling to secure its future amid the threat of administration, closing in on deals to sell its consumer and broadband arms as it seeks to save 900 jobs.

The telecoms company said on Friday it was in the final stages of sealing deals to sell its consumer business as well as its wholesale operation, PXC.

“The company expects to conclude both transactions imminently,” TalkTalk said.

Also being reported in the Telegraph who are focusing on it being a matter of national security...

 

[MP33]

Are TalkTalk involved with the radio system for the Emergency services. Which will be replacing Airwave.

 

[BuhSnarf]

I thought the replacement (Emergency Services Network) was based upon EE?

 

[jon0844]

Are TalkTalk involved with the radio system for the Emergency services. Which will be replacing Airwave.

No, that's EE.

 

[D1537]

Manchester City.

 

[jon0844]

Manchester City.

 

[Tetchytyke]

I think we'll see the Three stores go and Vodafone ones remain, but perhaps Three have some stores in a better location and will change like EE.

I think it'll depend on who is running the shops, even before the merger we saw Vodafone royally screw over their franchisees.

Vodafone settles legal claim brought by 62 former franchisees after Guardian investigation

Agreement, without admission of liability, ends 19-month high court dispute that small-business owners said left them with large debts

www.theguardian.com

Vodafone has settled a long-running legal claim filed by 62 of its former franchisees who alleged the mobile phone group “unjustly enriched” itself at their expense by up to £85m.

The small-business owners – some of whom said they had suffered suicidal thoughts because of the pressure exerted by the telecoms group – launched the high court claim in 2024 after running up large personal debts they said had been caused by their deals with the company.

The plight of the 62 claimants – who represent almost 40% of a total 167 Vodafone franchisees – was first revealed by the Guardian in December 2024.

The former shopkeepers said in court papers that they had suffered large losses after Vodafone unilaterally slashed the sales commissions franchisees were paid for running the mobile phone group’s high street stores.

MPs subsequently compared the case with the Post Office Horizon IT scandal.

 

[jon0844]

Networks have worked hard to cut people out of the loop and go direct to customers. The days of service providers and independent phone stores are pretty much all gone - and I expect many franchises were deemed unnecessary.

If you do accessories or repairs, fine, but the carriers want to own the customer and lock them in with mobile, broadband, TV and more.

 

[Tetchytyke]

Modella Capital seem to be behind the purchase of Dealz, the European arm of Poundland, and seem to be front runners to buy the UK bit of Poundland too.

Adding them to the list of companies we expect to disappear soon!

 

[Silver Cobra]

Talk Talk don't appear to have been mentioned in this topic

TalkTalk races to sell consumer and broadband arms as administration looms

Customers and jobs ‘top priority’ as company closes in on deals with Opus Broadband and investment group Octopus

www.theguardian.com

Also being reported in the Telegraph who are focusing on it being a matter of national security...

That might explain why I was moved from TalkTalk to Utility Warehouse for my home phone and broadband at the start of the year (I've now switched to YouFibre after a rather hit-and-miss service during the spring and summer). The writing must have been on the wall back at the end of last year, prompting TalkTalk to start offloading customers to other providers.