Major retail chain with 124 stores to ‘close up to 27’ branches as part of big shake-up
HOBBYCRAFT is reportedly set to close as many as 27 of its stores as part of a major shake-up.
Hundreds of jobs could be at risk as the company's owner Modella Capital is planning to launch a CVA, Sky News is reporting.
A CVA, or company voluntary arrangement, is a formal insolvency process allowing companies to pay off their debts over a fixed period of time.
It is a common way for struggling businesses to try and stay afloat, with chains such as Caffe Nero and Body Shop having previously entered into one.
People close to the proposals told Sky's City editor Mark Kleinman that nine shops will close, resulting in about 100 jobs lost.
A further 18 will only remain open if negotiations with landlords over rent cuts end successfully.
It was previously reported Modella was looking to negotiate two-year rent-free periods at some shops.
Hobbycraft has 124 stores and has a workforce of around 2,400 people.
It's the largest arts and crafts retailer in the UK, and sells everything shoppers need for art, knitting and crochet, haberdashery, papercraft, wedding and party, baking, jewellery making and more.
The news comes it was reported Modella was in talks with advisers to restructure its business.
The group bought Hobbycraft, which was founded in 1995, from private equity firm Bridgepoint last summer.
The sale came after Bridgepoint had said it was exploring "strategic options" for the business.
Modella, which specialises in taking over troubled retail companies, also recently snapped up WHSmith's high street arm and bought The Original Factory shop.