1 month ago
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A MAJOR retail chain has revealed plans to permanently shut at least nine stores across the UK, placing up to 126 jobs at risk.
Hobbycraft, owned by private equity firm Modella Capital, is implementing the closures as part of a sweeping restructure announced today.
AlamyHobbycraft has 124 stores across the UK and a workforce of around 2,400 people[/caption]
The retailer said the nine stores will stop trading by mid-July, affecting between 72 and 126 jobs.
In addition to the store closures, Hobbycraft announced that the restructuring will lead to redundancies at its Bournemouth head office and its distribution centre in Burton-on-Trent.
It added that the future of “a number of other stores” is still being reviewed.
Sky News reported earlier this morning that the chain is preparing to initiate a Company Voluntary Arrangement (CVA), which could ultimately result in the closure of up to 27 stores.
A CVA is a formal insolvency process that allows struggling businesses to reach an agreement with their creditors to reorganise their debts and improve financial stability.
One of the key elements of a CVA is the ability to renegotiate lease terms with landlords.
The company may propose reduced rent payments, sometimes referred to as “turnover-based rent,” where rent is linked to the store’s revenue, or a temporary rent-free period to ease cash flow pressures.
Previous reports suggested that Modella had been seeking to negotiate two-year rent-free periods for certain stores.
However, if these negotiations fail, the chain could be forced to close a further 18 shops.
Full list of Hobbycraft stores closing
These are all the Hobbycraft stores in the UK that will close by mid-July:
Hobbycraft, chief executive Alex Willson, said today: “Hobbycraft is the UK’s leading arts and crafts retailer, with a strong presence across the country and online, fantastic colleagues and loyal and engaged customers.
“Very sadly, the strength of our offering has not made us immune from the challenges faced by the retail sector in recent years.
“Closing stores is always a last resort and this has been an extremely difficult decision.
“Making these changes is sadly a necessary action to enable us to keep our doors open to crafters up and down the country.”
Hobbycraft has 124 stores and has a workforce of around 2,400 people.
It’s the largest arts and crafts retailer in the UK, and sells everything shoppers need for art, knitting and crochet, haberdashery, papercraft, wedding and party, baking, jewellery making and more.
Modella Capital bought Hobbycraft, which was founded in 1995, from private equity firm Bridgepoint last summer.
The sale came after Bridgepoint had said it was exploring “strategic options” for the business.
Modella, which specialises in taking over troubled retail companies, recently snapped up WHSmith’s high street arm.
The parent company is also preparing a restructure of The Original Factory Shop, following its acquisition just two months ago.
It is understood that between 30 and 40 of these stores could face closure, potentially resulting in hundreds of additional redundancies.
RETAIL PAIN IN 2025
The British Retail Consortium has predicted that the Treasury's hike to employer NICs will cost the retail sector £2.3billion.
Research by the British Chambers of Commerce shows that more than half of companies plan to raise prices by early April.
A survey of more than 4,800 firms found that 55% expect prices to increase in the next three months, up from 39% in a similar poll conducted in the latter half of 2024.
Three-quarters of companies cited the cost of employing people as their primary financial pressure.
The Centre for Retail Research (CRR) has also warned that around 17,350 retail sites are expected to shut down this year.
It comes on the back of a tough 2024 when 13,000 shops closed their doors for good, already a 28% increase on the previous year.
Professor Joshua Bamfield, director of the CRR said: “The results for 2024 show that although the outcomes for store closures overall were not as poor as in either 2020 or 2022, they are still disconcerting, with worse set to come in 2025.”
Professor Bamfield has also warned of a bleak outlook for 2025, predicting that as many as 202,000 jobs could be lost in the sector.
“By increasing both the costs of running stores and the costs on each consumer’s household it is highly likely that we will see retail job losses eclipse the height of the pandemic in 2020.”
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