Hobbycraft closing down: Havant branch looks to be safe from cuts for now

• Modella Capital is set to launch a company voluntary arrangement (CVA) for a well-known arts and crafts retailer
• Nine stores are confirmed for closure by mid-July, impacting up to 126 jobs
• A further 18 stores are at risk, with future closures dependent on rent negotiations with landlords
• If additional stores close, up to 150 more jobs could be lost, including at the retailer's head office and distribution centre
• Modella is also planning a similar restructuring for The Original Factory Shop, raising concerns about further closures across its retail portfolio

The new owner of WH Smith’s high street business is drawing up plans that could lead to the closure of nearly a quarter of a well-known arts and crafts retailer’s stores.

Modella Capital, a private investment firm known for acquiring struggling retail businesses, is preparing to launch a company voluntary arrangement (CVA) for Hobbycraft as early as Wednesday (April 23).

CVAs have become a common strategy in the retail and hospitality sectors, allowing companies to close underperforming stores and negotiate lower rents.

Modella has said nine stores will stop trading by mid-July, affecting between 72 and 126 jobs, though the Hobbycraft in Solent Retail Park is not on that list. But the company has added that the future of “a number of other stores” is still being reviewed.

Sources close to the matter told Sky News, an additional 18 stores are at risk and will only remain open if successful rent reduction talks with landlords are concluded. It is not yet known if Havant store is among this list.

The remaining 97 Hobbycraft stores are expected to continue trading as normal, safeguarding approximately 1,800 jobs. But if negotiations with landlords fall through and the 18 at-risk stores are also forced to close, a further 150 redundancies could follow, based on the average number of staff per store.

Hobbycraft added that the restructuring will also result in redundancies across its Bournemouth head office and distribution centre in Burton-on-Trent. It has not disclosed how many roles this will affect.

The CVA process is likely to be launched just before Modella begins a similar restructuring at The Original Factory Shop (TOFS), a discount retail chain it acquired only two months ago.

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One industry insider suggested that between 30 and 40 TOFS stores could shut down, potentially leading to several hundred job losses.

These twin restructuring efforts are expected to spark concerns over whether Modella has similar plans for WH Smith’s high street operations, which it intends to rebrand as TG Jones following its recent acquisition.

Which Hobbycraft stores could close?

The following stores are set to close:

• Bagshot, Surrey
• Basildon, Essex
• Borehamwood, Hertfordshire
• Bristol: Imperial Retail Park
• Canterbury, Kent
• Cirencester, Gloucestershire
• Dunstable, Bedfordshire
• Epping Forest, Essex
• Lakeside Shopping Centre, Essex

In terms of the 18 further reported at risk stores, the company hasn’t confirmed which locations may be in the firing line.

If further stores do close, it’s likely that closures will target sites that are either underperforming, too costly to run, or situated in areas with overlapping catchments.

Stores in premium locations may be at risk unless landlords agree to significant rent reductions, as could sites in retail parks that have seen reduced footfall post-pandemic.

Areas with more than one store within a short driving distance may see consolidation. For instance, Reading, Maidenhead, and Basingstoke are relatively close together — one of those might be on the chopping block.

The firm may also choose to pull out of locations where newer leases haven't yet turned profitable, or where stores are too small to stock the full product range and don’t support the brand’s experiential, hands-on retail model.

Until more concrete details are revealed, customers and staff alike face an uncertain wait.

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