Hobbycraft, which is one of the UK’s biggest arts and crafts retailers, has been snapped up by a specialist investor whose team has previously supported chains including Paperchase and Tie Rack.
Investment group Modella Capital announced it had bought the Bournemouth-headquartered company from its majority owner, the fund management group Bridgepoint, for an undisclosed sum.
Hobbycraft has 2,000 employees and 124 stores across the UK, and in its last financial year ending February 19, 2023, achieved revenue of £211m, compared to £203.1m in the previous period, according to documents filed to Companies House.
Despite an increase it sales, the company widened its pre-tax loss to £16.2m during the 12 months, up from a pre-tax loss of £7.4m in the year before.
The company said this had been driven by weaker than expected sales in the first half of its financial year, exacerbated by “unprecedented inflationary cost pressures”.
Hobbycraft chief executive Dominic Jordan said of Modella Capital: “Their deep understanding of the retail sector, shared vision and cultural values, combined with significant reserves of growth capital, make them an ideal partner.”
Joseph Price, managing director at Modella Capital, added: “We look forward to accelerating the team’s growth strategy through investment in the physical footprint of the group, displaying a real commitment to bricks and mortar retail, and by enhancing the returns generated from their existing sales channels, including their growing online business.”
Modella is connected to the turnaround firm Rcapital, which previously owned Little Chef.
According to its website, Rcapital’s investment portfolio includes No Ordinary Designer Label, the UK licensing partner for Ted Baker, which went into administration earlier this year.
It was revealed this weekend that the designer’s remaining 31 stores in the UK would close this week, putting 500 jobs at risk.
Rcapital had also previously been reported to be in the running to acquire The Body Shop but looks likely to lose out to beauty industry tycoon Mike Jatania’s Auréa consortium.