UK DIY News
Hobbycraft To Close Nine Stores; CVA Expected
Sky News has reported that the owner of Hobbycraft, private equity firm Modella Capital, is to close nine of the arts and crafts chain's stores and launch a CVA.
A statement on the Hobbycraft website reads:
"Following a strategic review of the business we will be closing some of our stores. As a result, the opening hours at the stores listed below may be reduced or subject to change.
"Bagshot, Basildon, Bristol Imperial, Borehamwood, Canterbury, Cirencester, Dunstable, Epping Forest, Lakeside"
The Sky News story indicates that in addition to the nine store closures, a further 18 branches are at risk if the company fails to agree rent reductions with landlords, leaving 97 stores unaffected. It is estimated that job losses at the initial nine stores will be in the region of 100, with a further 150 should the additional 18 stores close and an undisclosed number across Hobbycraft's head office and distribution sites. BBC coverage indicates that the initial nine stores will close by mid-July, with 72 to 126 job losses.
Alex Wilson, Hobbycraft CEO told the BBC: "For many our stores are more than just arts and crafts supplies - they have become places for gaining crafting ideas and inspiration.
"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."
A spokesman for Modella told Sky News: "Modella Capital is absolutely committed to bricks and mortar retail, at a time when the sector is coming under increasing pressure.
"[Modella] understands that high streets provide a vital service to consumers, are an essential source of employment and are key to the future success of local economies.
"Modella Capital believes that many retailers can thrive on the high street; particularly those with a distinctive offer and a loyal customer base.
"Where necessary, Modella Capital has the skills and experience to restructure retailers that require it, in order to ensure they create profitable, ongoing businesses that will continue to serve communities and employ thousands of people across the UK."
Modella Capital, which agreed the purchase of WH Smith late earlier this year, is also understood to be planning a CVA for The Original Factory Store chain. It is also thought to be interested in acquiring a stake in the kitchenwares company Lakeland.
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