A MAJOR craft shop chain that’s a favourite with mums and has 85 sites could be sold.
One of Britain’s leading arts and crafts retailers, Hobbycraft, is about to be sold to Modella Capital, a specialist investor with a history of backing chains like Paperchase and Tie Rack.
Sky News has learned that Modella Capital is in advanced negotiations to acquire Hobbycraft from the private equity firm Bridgepoint.
The deal could be finalised within days. However, it remains unclear how much Modella will likely pay for the company.
Modella Capital is linked to the turnaround firm Rcapital, a former owner of Little Chef.
Its portfolio includes No Ordinary Designer Label, Ted Baker‘s UK licensing partner, which went into administration earlier this year.
Hobbycraft was founded in 1995 and operates over 85 stores.
Modella Capital and Bridgepoint have been contacted for comment.
Hobbycraft is the largest arts and crafts retailer in the UK.
Shoppers can bag everything they need for art, knitting and crochet, haberdashery, papercraft, wedding and party, baking, jewellery making and more.
The news of the sale comes just months after Bridgepoint, was said to be exploring “strategic options” for the business.
The private equity group hired US investment bank Raymond James to review the retailer’s operations in February.
However, even if the retailer is to be sold, it doesn’t mean store closures and redundancies could follow.
It’s normal for retailers to assess the value of their current ownership.
Successful retailers with solid growth potential may attract buyers looking to invest in a profitable venture.
Retailers struggling with profitability may be sold to investors or other companies that believe they can turn the business around.
Hobbycraft revealed plans to open new stores in September 2023 after a more robust demand for arts and crafts boosted sales.
It opened seven brand new stores at the end of last year.
The brand has been owned by Bridgepoint since 2010.
Bridgepoint is one of the world’s leading private asset growth investors, specialising in private equity and private debt.
As of 2024, it has over €39.5bn of assets under management and a local presence in Europe, the US and China.
The private equity has owned several brands commonly seen on UK high streets at different times.
Pets at Home was acquired by Bridgepoint for £230million in July 2004.
It was then sold to KKR for an undisclosed sum in 2010.
In 2008, Bridgepoint purchased a 33% non-controlling stake in Pret A Manger from Mcdonald’s for £364million.
The brand was sold to JAB for an undisclosed sum in May 2018.
Bridgepoint currently owns Burger King‘s UK and French operations.
In October, FatFace, which was once owned by Bridgepoint, was acquired by Next for the value of £115.2million.
FatFace continues to operate as a separate entity, but shoppers can still buy the brand’s clothing on the Next website.
In 2007, FatFace was acquired for £360million by private equity group Bridgepoint Capital.
But in 2020, Fat Face’s lenders, Lloyds Banking Group and Goldman Sachs, took over the business from Bridgepoint and reduced its debts, reducing debts by £146.8 million to £25.6 million.
What else is happening on the high street?
Ted Baker is closing all remaining UK stores forever this evening.
The troubled retailer fell into administration earlier this year after a deal went sour between its American owners, Authentic Brands, and a Dutch operating partner meant to run the store operations.
Administrators at Teneo have been trying to find a rescue buyer for the business, but it is understood that House of Fraser, owned by Mike Ashley‘s Frasers Group pulled out of early talks.
When Ted Baker fell into administration in March it employed 975 people and had 46 shops in the UK and Europe.
Administrators have already closed 15 stores across the UK with the loss of 245 jobs.
But it had been hoped that the remaining stores would stay open.
The remaining closures are expected to affect around 513 employees across the UK and in the company’s head office and 78 in Ireland.
The Sun exclusively revealed in July that the brand was at risk of disappearing from the high street forever within weeks.
On Monday, tile supplier CTD Tiles struck a rescue deal with rival brand Topps Tiles after collapsing into administration.
The Newcastle-based brand will shut a total of 56 sites and cut 268 jobs, administrators have said.
In July, flooring retailer Tapi struck a multimillion-pound rescue deal to save the Carpetright brand and dozens of stores.
Tapi purchased 54 of the collapsed chain’s stores and two warehouses in a pre-pack administration deal that saved 300 jobs.
Why are retailers closing shops?
EMPTY shops have become an eyesore on many British high streets and are often symbolic of a town centre’s decline.
The Sun’s business editor Ashley Armstrong explains why so many retailers are shutting their doors.
In many cases, retailers are shutting stores because they are no longer the money-makers they once were because of the rise of online shopping.
Falling store sales and rising staff costs have made it even more expensive for shops to stay open. In some cases, retailers are shutting a store and reopening a new shop at the other end of a high street to reflect how a town has changed.
The problem is that when a big shop closes, footfall falls across the local high street, which puts more shops at risk of closing.
Retail parks are increasingly popular with shoppers, who want to be able to get easy, free parking at a time when local councils have hiked parking charges in towns.
Many retailers including Next and Marks & Spencer have been shutting stores on the high street and taking bigger stores in better-performing retail parks instead.
Boss Stuart Machin recently said that when it relocated a tired store in Chesterfield to a new big store in a retail park half a mile away, its sales in the area rose by 103 per cent.
In some cases, stores have been shut when a retailer goes bust, as in the case of Wilko, Debenhams Topshop, Dorothy Perkins and Paperchase to name a few.
What’s increasingly common is when a chain goes bust a rival retailer or private equity firm snaps up the intellectual property rights so they can own the brand and sell it online.
They may go on to open a handful of stores if there is customer demand, but there are rarely ever as many stores or in the same places.