Hobbycraft, one of the UK’s leading arts and crafts retailers, has been acquired by specialist investor Modella Capital.
The Bournemouth-based retailer was purchased from previous majority owner, investment firm Bridgepoint, for an undisclosed amount by Modella, known for its involvement with chains such as Paperchase and Tie Rack
The company, which employs 2,000 staff and operates 124 stores nationwide, reported revenues of £211m in the financial year ending February 19, 2023. This is an increase from £203.1m in the previous year, as per the latest Companies House filings.
Despite the rise in sales, Hobbycraft experienced a widening of its pre-tax losses to £16.2m over the 12 months, a significant jump from the £7.4m loss reported the prior year.
The company attributed this downturn to weaker than anticipated sales in the first half of the financial year, compounded by “unprecedented inflationary cost pressures”.
Dominic Jordan, chief executive of Hobbycraft, praised Modella Capital, saying: “Their deep understanding of the retail sector, shared vision and cultural values, combined with significant reserves of growth capital, make them an ideal partner.”, as reported by City AM.
Joseph Price, managing director at Modella Capital, said: “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 linked with turnaround specialist Rcapital, which once owned the iconic roadside restaurant chain Little Chef.
Rcapital’s website lists its investment portfolio, which includes No Ordinary Designer Label, the UK licensing partner for Ted Baker. Earlier this year, the fashion brand faced administration.
Over the past weekend, it was disclosed that Ted Baker’s remaining 31 stores across the UK are set to shut down this week, endangering 500 jobs.
Previously, Rcapital was mentioned as a potential buyer for The Body Shop. However, it now appears likely that beauty industry magnate Mike Jatania’s Aurea consortium will outbid them for the acquisition.
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