Dozens of former WH Smith stores across Britain are poised to close after the High Court signed off a sweeping restructuring of the business.
TG Jones, the new name for former WH Smith branches, has won court approval for its rescue plan, paving the way for 150 closures.
The High Court backed a deal on Wednesday to slash rents and close underperforming stores. Landlords will be given the option of either accepting rent cuts or terminating TG Jones's leases, effectively shutting the stores.
Lawyers for TG Jones told the court on Monday that the "working assumption" is that around 300 of its 450 stores would stay open as its proceeds with its plan.
It marks a fresh blow for Britain's already embattled high streets, which have suffered a succession of retail failures in recent years.
Some of the stores affected will have been staples of their high street for decades, given that WH Smith has traded for well over two centuries. Its first shop opened in 1792.
In his speech this week on returning to Parliament, Andy Burnham, the presumptive next prime minister, vowed to revitalise high streets and make them "the new symbol of British renaissance".
The ruling clears the way for TG Jones to unlock a £15m loan from its private equity owner, Modella Capital, on top of £10m already advanced in April.
If the deal had been rejected, the retailer faced the imminent prospect of tumbling into administration under the weight of its debts. Lawyers acting for TG Jones told a judge that the company faced an £8m shortfall in tax, rent, supplier and payroll bills by the end of the week.
The retailer's future had hung in the balance after Mr Justice Hildyard delayed his ruling on Monday, telling the High Court the matter was "too complex" to decide without further time to review transcripts of earlier meetings.
That delay left TG Jones scrambling to pay £14.1m of bills due on Tuesday, with a further £3.1m owed to suppliers on Friday.
TG Jones – the fictitious name given to WH Smith's 450 former high street shops after Modella bought it for an initial £10m last year – employs around 4,700 staff.
Responding to the court approval, Alex Willson, chief executive of TG Jones, said: "The plan protects the substantial core of the store estate and makes TG Jones a stronger, more sustainable business.
"We are incredibly grateful to all the colleagues, partners and stakeholders who engaged constructively throughout the process, and to Modella Capital for its continued financial commitment."
Multiple groups of landlords and creditors voted against the rescue plan but the retailer secured support from lenders and the bulk of its suppliers.
Because of the way the rescue plan is structured, a judge can sanction it even where some classes of creditors object – provided at least one class backs it and the court is satisfied the plan treats its opponents fairly.
Suppliers that TG Jones no longer intends to work with face having their debts written off entirely, while so-called non-core suppliers will recover less than half of what they are owed upfront, and may face a wait of more than three years to recover the remainder.
Toymakers, card companies and publishers are among those affected by the restructuring.
Modella has blamed TG Jones's troubles on its separation from the WH Smith brand. WH Smith refused to license the brand when Modella bought the high street shops, forcing it to rebrand them. TG Jones has also been hit by a broader downturn in consumer confidence, its private equity owners argue.
Tom Smith KC told the court on Monday that the business was "highly distressed" after a "long-term sales decline", pointing to high inflation, the shift to online shopping, rising labour costs and higher taxes.
However, landlords previously told The Telegraph they viewed the restructuring as a "stitch-up", while industry sources described it as "the most aggressive retail restructuring plan the UK high street has ever seen".
Creditors have been left unhappy by arrangements put in place by Modella to extract payments from the TG Jones business.
