Hobbies Aren’t Dead. Bad Balance Sheets Are.

If you took the headlines at face value, you would think hobbies had fallen out of fashion somewhere between the rise of TikTok and the latest must-watch Netflix series.  Apparently no one knits anymore. No one paints. And no one spends an entire day constructing something that will, with luck, resemble some kind of seasonal table décor.

And yet, walk into a Hobbycraft on a Saturday and you’ll find the place humming. Baskets full of yarn, children clutching slime kits as if they are some kind of contraband, and adults hovering thoughtfully next to the Cricut machines, convincing themselves that owning one is the gateway to creative freedom.

The hobby market isn’t dying. In fact, it’s busier than ever. The pressure point is in the business model and balance sheets serving it.

Which is why Hobbycraft – and its recent move into something called a CVA – make for an unexpectedly revealing case study.

Craft Has Left the Classroom

What has changed isn’t the appetite for making things. It’s the route in.

There was a time when learning to crochet meant signing up to an evening class in a draughty church hall, with just a paperback guide and a mild sense of dread to help you. Now you open YouTube, and within minutes, someone with immaculate lighting is teaching you to produce a “beginner-friendly heirloom blanket”, while TikTok assures you it can be mastered in 60 seconds.

Then there’s Pinterest, which doesn’t just inspire; it helps build your shopping list. You go from “that’s nice” to “apparently I need four shades of green and a glue gun” in under ten minutes.

Digital hasn’t replaced craft. It’s lowered the barrier to entry and sped everything up.

Trends now form online, spike quickly and move on just as fast. A hobby that starts on a Sunday can turn into a side business by midweek. Demand arrives in bursts, shaped by algorithms rather than seasonal catalogues.

And that’s the crux of it.

A large-format retailer with long leases and fixed costs is built for steady footfall. The modern hobbyist behaves more like a flash mob. They discover online, compare prices instantly, order some materials at 10pm, and wander into a store only if it suits them.

The interest is real, but the revenue arrives in a far less predictable pattern.

Which brings us neatly back to Hobbycraft.

Hobbycraft: A Reset, Not a Funeral

Hobbycraft has long been the UK’s go-to arts and crafts chain – a playground for anyone who likes paint, glitter or glue guns.

After more than a decade under private equity ownership, it changed hands when Modella Capital bought it from Bridgepoint and shortly after that, the headlines shifted. Store closures. Job cuts. Whispers of a dreaded CVA.  

For those not fluent in retail acronyms, a CVA (Company Voluntary Arrangement) is a formal restructuring tool that allows a company to renegotiate its debts – usually rent owed to landlords – while continuing to trade. It’s not administration, it’s not liquidation, and it’s certainly not “game over”. It’s more of a financial reset button that gives a company breathing space to adjust its cost base without collapsing entirely. In retail, the target is usually the store estate: too many sites, wrong locations, historic rents that no longer match reality, and payment schedules designed for a different era.

And that trio of closure, cuts and restructuring is the sort of thing that tends to trigger one word: decline.

But look more closely at what actually happened and the picture becomes clearer.

Under the CVA:

• The weakest stores were marked for closure, rather than pretending they might suddenly turn a corner.
• A larger core of stores was kept open, with a clear distinction between what worked and what didn’t.
• Rent payment terms were moved from hefty quarterly payments in advance to more manageable monthly rents, easing cash flow strain.

That last point sounds dull, but it isn’t. Quarterly rent in advance is a bit like paying three months’ gym membership before you’ve even remembered where your trainers are. Monthly payments smooth the spikes and remove the need to hold your breath every three months.

At the same time, Modella began looking at whether there might be a buyer for Hobbycraft after interest started coming in. That’s hardly the move of someone barricading the doors. It suggests something much more straightforward. Buy the business, fix what clearly isn’t working, steady the rent bill, and then see what the market thinks.

 Owners tidy things up before asking for a price. And in this case, the CVA wasn’t about last-minute rescue. It was part of getting the business into better shape before asking what it might be worth.

How a CVA Can Increase Value

For investors or potential buyers, what matters isn’t whether a CVA happened. It’s what the business looks like afterwards.

Start with the estate. Close the weakest stores and the average performance of what remains improves immediately. You’re no longer subsidising locations that weren’t pulling their weight. What’s left is easier to read, and that usually makes everyone feel a little more comfortable.

Then look at cash flow. Smoother rent payments mean fewer unpleasant surprises. Predictability may not be thrilling, but it tends to make valuations less jumpy.

And finally, there’s clarity. Instead of endless discussions about historic leases and ongoing negotiations, attention can move to what the business actually sells and how it plans to grow. That’s a much more comfortable place for capital to sit.

And crucially, the core remains intact. The brand, the customers and the supply chains are still there. You’re not rebuilding; you’re refining.

A CVA doesn’t turn a struggling retailer into a superstar overnight. But what it can do is make the business cleaner, steadier and easier to buy. And in finance, that often makes all the difference.

The Last Word

Retail stories love a dramatic arc – boom, bust, rescue, redemption. The reality is usually quieter than that.

Hobbycraft isn’t a morality tale about the death of the high street, nor is it a triumphant reinvention story. It’s a reminder that law isn’t only wheeled out when things have come unstuck. Used sensibly, tools like a CVA allow a business to make practical adjustments before small misalignments turn into larger problems.

In this case, it meant tightening the framework without discarding the substance.

Which, for those of us who still enjoy a well-stocked aisle of pens and paper, is a pretty good outcome.