Up to 27 Hobbycraft stores could close as soon as Wednesday amid a major restructuring by the new owner of WH Smith’s high street shops.
The arts and crafts retail chain has more than 100 stores across the UK.
But private investment firm Modella Capital has slated nine for closure, Sky News reports.
This alone would put 100 people out of work. Even more are at risk dueongoing negations between the company and stores’ landlords.
If Modella doesn’t secure rent cuts for 18 branches, they too could close, resulting in at least 150 redundancies.
Modella, which specialises in taking over struggling retailers, bought all 480 of WH Smith’s high street stores for £76million last month.
It has already confirmed the disappearance of the WH Smith brand from the high street after 233 years when it renames the business ‘TG Jones’.
Now there are fears the stores disappear with the household name if Modella pursue a similar strategy as elsewhere in its portfolio.
The private investment firm may be about to close up to 40 branches of The Original Factory Shop, a discount chain it bought two months ago.
Modella is expected to launch a company voluntary arrangement (CVA) at Hobbycraft this week.
That’s a formal process to allow a company to pay off its debts.
Modella insists it is ‘absolutely committed to bricks and mortar retail’, even when ‘the sector is coming under increasing pressure’.
Around 13,000 high street stores shut down in 2024. Nearly 170,000 retail jobs were lost.
Shoe Zone blamed insurance hikes and a higher minimum wage, introduced by the Labour government, for its decision to close some of its 297 stores.
A spokesperson for Modella said: ‘Modella] understands that high streets provide a vital service to consumers, are an essential source of employment and are key to the future success of local economies.
‘Modella Capital believes that many retailers can thrive on the high street; particularly those with a distinctive offer and a loyal customer base.
‘Where necessary, Modella Capital has the skills and experience to restructure retailers that require it, in order to ensure they create profitable, ongoing businesses that will continue to serve communities and employ thousands of people across the UK.’
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