In April 2025, the UK’s leading arts and crafts retailer Hobbycraft announced the closure of nine of its stores as part of a major restructuring plan. The decision follows the acquisition of the company by private investment firm Modella Capital in August 2024.
The primary goal of the restructuring is to reduce operating costs and align the business with the current realities of the retail sector.
Reasons Behind the Restructuring
According to CEO Alex Wilson, Hobbycraft has been facing multiple challenges common across the retail industry:
- Rising rent and operational costs
- Declining consumer spending power
- Increased competition from online retailers
- Shifting customer preferences and behaviors
In this context, shutting down underperforming locations is considered a necessary step to ensure the long-term sustainability of the business.
List of Closing Stores
By mid-July 2025, the following nine Hobbycraft locations are set to close:
- Bagshot, Surrey
- Basildon, Essex
- Borehamwood, Hertfordshire
- Bristol – Imperial Retail Park
- Canterbury, Kent
- Cirencester, Gloucestershire
- Dunstable, Bedfordshire
- Epping Forest, Essex
- Lakeside Shopping Centre, Essex
These closures are based on a detailed assessment of each store’s financial performance and future growth prospects.
Additional Closures Possible
In addition to the confirmed closures, 18 more stores are currently under review. Their future depends on ongoing negotiations with landlords regarding rent reductions.
If agreements cannot be reached, the total number of closures may rise to 27, potentially affecting up to 250 jobs nationwide.
Impact on Staff and Communities
The initial wave of closures is expected to result in the loss of approximately 100 jobs. Further redundancies may also occur at Hobbycraft’s head office in Bournemouth and its distribution center in Burton-upon-Trent.
These changes have raised concerns among employees and local communities, particularly in smaller towns where Hobbycraft stores serve as creative hubs for craft enthusiasts.
Modella Capital’s Strategic Plan
Modella Capital, known for restructuring and turning around retail brands, plans to implement a Company Voluntary Arrangement (CVA). This UK legal process allows companies to renegotiate debt terms and lease agreements.
The aim is to ease financial pressure and position Hobbycraft for a more sustainable future. The firm has stated its intention to preserve jobs wherever possible and maintain a long-term presence in key retail locations.
Wider Retail Market Context
Hobbycraft’s restructuring reflects broader trends across the UK retail sector. According to market analysts, more than 17,000 stores are expected to close in 2025, with job losses potentially exceeding 200,000.
Key drivers include:
- Inflation and surging operational costs
- Weakened consumer confidence
- Accelerated shift to e-commerce
Retailers that fail to adapt quickly face difficult choices, including store closures and business model overhauls.
Conclusion
The closure of nine Hobbycraft stores is a key component of a broader effort to stabilize the company’s operations and adapt to an evolving retail landscape. While the decision will impact jobs and communities, it may ultimately safeguard the future of the brand.
The company’s success going forward will depend on its ability to negotiate effectively with landlords, embrace digital transformation, and streamline its store network to meet modern market demands.
