Hobbycraft, the UK's largest craft retailer, has successfully navigated a challenging restructuring, completing its 13-month company voluntary arrangement (CVA) ahead of schedule. This positive outcome marks a notable departure from the recent difficulties faced by its owner, private equity firm Modella Capital, with other high street acquisitions.
The craft giant reported a significant boost in its digital presence during the restructuring period. Online active users jumped by 13%, while new users to its website increased by 10%. This growth was notably driven by a surge in demand for model-making supplies, with online sales of paintable characters and figures skyrocketing by 343%. Furthermore, demand for crochet kits saw a substantial 141% rise, attributed in part to a partnership with Olympian and knitting enthusiast Tom Daley.
Graeme Campbell, Hobbycraft's Chief Operating Officer, expressed optimism about the company's future. He stated that completing the CVA ahead of schedule was a crucial milestone, establishing stronger foundations for growth. The company, founded in 1995 and operating 105 stores across the UK, aims to further expand by encouraging more people to engage with crafting for its benefits of joy, confidence, and wellbeing.
This success story stands in stark contrast to Modella Capital's recent track record. The Mayfair-based private equity firm, which acquired Hobbycraft in August 2024 for an undisclosed sum, had reportedly considered offloading the business as recently as February this year. Modella has faced criticism for its strategy of acquiring high street retailers, often moving to offload or wind down operations just months after acquisition. The firm attributed these difficulties to weak consumer confidence and what it termed 'adverse government fiscal policies', leading to the winding down of businesses like Original Factory Shop and Claire's Accessories shortly after purchase.
Modella's recent restructuring efforts for the 480 high street locations acquired from WH Smith last year also highlight its turbulent approach. That proposal initially faced significant opposition from landlords, including FTSE 100-listed British Land, over plans to cut rent on profitable stores. While Modella eventually secured approval by softening its terms, this restructuring will still result in the closure of 150 TG Jones locations, underscoring the precarious nature of many of its high street investments.