Private equity firm Bridgepoint has backed the management buy-out of HobbyCraft, an arts and crafts retailer.
Private equity firm Bridgepoint has backed the management buy-out of HobbyCraft, an arts and crafts retailer.
HobbyCraft has 47 stores across the UK addressing catering to the arts and crafts retail market. Chris Crombie, CEO of HobbyCraft says: ‘There is significant growth capacity and roll-out potential yet to come [from HobbyCraft] which we look forward to achieving in the next five years and beyond.’
The arts and crafts market in the UK is estimated to be worth £2 billion, comprising a range of operators form specialist independents to large generalists. HobbyCraft carries over 35,000 products, which cater for more than 250 different activities.
Total sales at HobbyCraft, which has 1,800 staff, increased by 11 per cent to £68.7 million for the year ending February 2009, and profit before tax increased 67 per cent to £5.4 million for the same period. Year to date sales for the 45 weeks to 3 January this year were 24 per cent ahead of the same period last year and like-for-like sales up 8.8 per cent for the same period.
Key product areas on offer include card making, knitting, needle crafts and haberdashery, fine art, jewellery making, framing, wedding stationery, jigsaws, kids crafts, model making and seasonal crafts.
James McGibbon, who leads Bridgepoint’s investment activities in the consumer sector, says the company can significantly develop its online presence and will be looking to more than quadruple its number of stores in the medium term.
sound advice
Grant Thornton acted as corporate finance legal advisors to the vendors, led by partner Simon Davies, and supported by Paul Stout and Carlie Arkell. They worked closely with the shareholders to ensure a competitive auction process was run to a tight timescale. The process began in earnest in February 2010 and was concluded on 28 April, just seven days after exclusivity was granted to Bridgepoint.
Davies says that the ‘the deal delivered excellent value to the shareholders with the opportunity to reinvest in the company alongside Bridgepoint and the management team.’
Solicitors Lamport Bassitt advised the shareholders on the sale of the entire issued share capital of HobbyCraft Group, and on their re-investment in the group going forward.
The Lamport Bassitt team was led by Sean Kelly who is head of the firm’s commercial department. He was supported by John Newton (partner, real estate) and Paula Eckton (partner, corporate). Commercial and operational due diligence for HobbyCraft was provided by Javelin Group, led by Javelin Group director Michael Fine.
