​Hobbycraft to close stores and axe around 100 jobs

A further 18 stores could be subject to a company voluntary arrangement (CVA), which could be launched this week as it draws up plans to potentially close around a quarter of stores, according to Sky News.

People close to the proposals told the publication that nine of Hobbycraft’s stores would close, with the loss of around 100 jobs, and that 18 more would remain open subject to whether negotiations with landlords over rent cuts were successful.

If not successful, the closure of the additional 18 stores would result in around 150 more redundancies. Sources add that job losses are also expected in Hobbycraft’s head office and distribution operations.

Modella Capital specialises in distressed retailers, and purchased Hobbycraft last August.

It acquired The Original Factory Shop (TOFS) in February this year, and most recently, it has taken on WHSmith’s high street arm, TGJones.

Modella is also undergoing a restructuring at TOFS, with another potential CVA on the cards.

An industry source speculated that hundreds of jobs could be lost at TOFS as around 30 to 40 stores could close.

Professional services firm FRP is overseeing the Hobbycraft CVA, while Interpath Advisory is working on the CVA at TOFS.

In a statement, a Modella spokesman said: “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.”