Hobbycraft pays out to creditors as it makes early exit from CVA

Hobbycraft, controlled by investor Modella Capital which also owns the rebranded WHSmith high street business TGJones, entered a CVA last year when it cut a tranche of stores and jobs as it sought to get onto a more secure financial footing.

The retailer said that its early move out of the CVA was “a significant milestone in the business’s financial recovery and ongoing transformation”.

Hobbycraft said it has made full payment of all creditor claims arising from the CVA, amounting to approximately £1m. The money went primarily to landlords and local authorities.

Modella managing director Joseph Price said: “This outcome demonstrates the strength of this much-loved brand, and the underlying resilience of the Hobbycraft business.

“The successful restructuring plan has transformed Hobbycraft’s prospects. We are proud to support a business that has met every one of its obligations to creditors ahead of time, and we look forward to the next phase of its growth.”

Hobbycraft chief operating officer Graeme Campbell said: “Exiting the CVA ahead of schedule is thanks to the hard work of our teams, the loyalty of our customers, and the constructive engagement with our creditors throughout this process. With this chapter closed, we can focus entirely on growing the business and delivering for our customers and colleagues.”

Hobbycraft’s most recent full-year results showed sales up 6.3% like-for-like to £208m. EBITDA reached £15.5m – 200% more than before the CVA. 

Modella is now expected to restructure TGJones, after the retailer suffered tough trading conditions and lost custom from shoppers unfamiliar with the new name for WHSmith’s former high street shops.