Entrepreneur and former Borders UK owner Luke Johnson is considering bidding for arts and crafts retailer HobbyCraft after it was put up for sale this week.
Johnson, who sold Borders to a Hilco-backed management buyout in July, has expressed interest in HobbyCraft in the past.
He told Retail Week this week: “I’d love to own it. Whether I could afford it or not I don’t know. I had conversations a while back. HobbyCraft is a category killer in a wonderful niche market.”
The 39-store retailer, which is thought to be worth around £70m, has appointed Grant Thornton to advise it on strategic options. It
has flourished in the recession,
benefiting from the ‘make do and mend’ attitude of cash-strapped consumers. It wants 180 stores in the long term, but lacks the funds to achieve this.
HobbyCraft chief executive Chris Crombie is considering a management buyout of the business from its current owner, the Haskins family.
Crombie told staff on Monday: “In order to further accelerate our expansion we have appointed advisers to help us assess the best way to grow the business. They will explore all of the options available to us, including the opportunity for a management buyout.”
He added: “HobbyCraft is an incredible success story. We’ve got a strong business, a fantastic team and a great future ahead of us.”
In the year to February 22, HobbyCraft’s sales rose 11% to £68.7m.
Johnson said there is little he would want to change about the business if he became an investor, as “they’re doing so brilliantly already”, but added that the retailer needed to look at operating a transactional website in the near future, like its US counterparts Michaels Stores, Jo-ann Fabric and Craft Stores and Hobby Lobby. The US arts and crafts market was worth $32bn (£19.61bn) last year, almost the same size as the American film industry.
Johnson added that his other retail investment, fashion chain East, has experienced a pick-up in trade after suffering declines in the recession. He said: “East is going extraordinarily well. The figures are just amazing.”