Major retail chain with 124 stores could ‘close up to 27’ branches as part of big shake-up

A MAJOR retail chain 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 at Hobbycraft as the company’s owner Modella Capital is planning to launch a CVA, Sky News reports.

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Hobbycraft has 124 stores across the UK and a workforce of around 2,400 people[/caption]

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, as part of the CVA process.

A further 18 will only remain open if negotiations with landlords over rent cuts end successfully.

If the shops are unable to stay open, it could mean at least a further 150 redundancies.

It was previously reported Modella was looking to negotiate two-year rent-free periods at some shops.

The rest of the chain’s 97 stores will remain unaffected by the shake-up, meaning 1,800 jobs are protected.

However, job losses are also expected at the company’s head office and distribution operations.

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 after 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.

It’s not clear yet which Hobbycraft stores could close.

Modella, which specialises in taking over troubled retail companies, also recently snapped up WHSmith‘s high street arm.

The parent company is also planning a restructuring at The Original Factory Shop after acquiring it just two months ago.

It’s believed between 30 to 40 of these shops could close, triggering hundreds more layoffs.

The retailer has shuttered more than a dozen stores over the past 12 months, including sites in Great Harwood in Lancashire and Invergordon, Scotland.

Despite this, it opened 27 stores last year and still has plans to continue its “store transformation” programme this year.

Meanwhile WHSmith has said it will close up to 20 stores in the coming weeks after it agreed to sell off nearly 500 of its high street shops.

Stores that have already closed recently or are yet to close include Halstead in Essex, Newport in Wales and Oldham in Greater Manchester.

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