Is Hobby Craft Toys Bundle Truly Bargain‑worthy?

Hobbycraft exited its Company Voluntary Arrangement (CVA) 18 months ahead of schedule, thanks to a surge in screen-free hobbies and a new model-making culture that revitalised sales across its Midlands stores.
The craft retailer, owned by Modella Capital, reported that its turnaround was underpinned by a combination of cost-saving measures, a refreshed product mix and an unexpected lift in DIY creativity as families spent more time at home.

The speed of the turnaround: numbers that surprise

When I first saw the filing at Companies House, the headline figure - an 18-month early exit from a CVA originally slated for three years - struck me as unusually rapid for a retailer of Hobbycraft’s size. The Retail Times noted that the CVA, which had been filed in early 2022, was lifted in October 2023 after the retailer posted a profit margin of 4.3% for the first time since the pandemic.

In my time covering the Square Mile, I have rarely seen a turnaround of this speed. A senior analyst at Lloyd’s told me that “the combination of a genuine shift in consumer behaviour and disciplined cost control can compress what would traditionally be a multi-year recovery into a matter of months”. The data supports that view: store footfall rose by 12% year-on-year in the twelve months to September 2023, while average transaction value grew by 7% - figures that sit comfortably above the sector average reported in the BoE’s Retail Outlook for 2023.

What is perhaps more striking is the geographic spread of this recovery. While the brand’s flagship stores in London remain the most visited, the Midlands - home to Hobbycraft’s extensive network of 70-plus outlets - have posted the steepest sales acceleration. The Shropshire Star highlighted that stores in Merry Hill, Wolverhampton and Selly Oak each saw double-digit growth, underscoring the regional relevance of the turnaround.

Key Takeaways

• Hobbycraft left its CVA 18 months early.
• Screen-free hobbies drove a 12% rise in footfall.
• Midlands stores delivered the strongest sales rebound.
• Profit margin topped 4% for the first time since 2020.
• Consumers benefit from more value-focused craft kits.

Screen-free hobbies: the cultural catalyst

Whilst many assume that digital entertainment would dominate post-pandemic leisure, the data from Hobbycraft’s recent performance tells a different story. The retailer’s own market research, disclosed in the CVA filing, indicated a 28% increase in sales of “screen-free” product categories - notably model-making kits, crochet supplies and DIY jewellery - compared with the pre-pandemic baseline.

In my experience, this reflects a broader societal shift. The Bank of England’s minutes from June 2023 recorded that household discretionary spending has gravitated towards activities that offer tangible outcomes, a trend reinforced by the rise in YouTube DIY channels and Instagram craft influencers. A senior partner at a boutique market-research firm told me that “the tactile satisfaction of creating something with one’s hands has become a form of mental-health respite, especially after prolonged periods of remote work”.

The impact on Hobbycraft’s product mix has been profound. The retailer has expanded its "model-making" aisle to include 3-D printing accessories, a move that aligns with the growing maker-culture in the UK. According to the Shropshire Star reported that sales of model-making kits alone grew by 31% between 2022 and 2023, outpacing the overall category growth of 15%.

From a consumer perspective, the appeal is clear: hobby kits now come packaged as “budget-friendly” solutions that promise a finished product without the need for additional purchases. In my own visits to Hobbycraft stores, the promotional signage emphasises “Christmas deals - up to 50% off - on kids craft kits and holiday arts kits”, a strategy that dovetails with the seasonal demand spike in December.

These developments illustrate how the craft retailer has capitalised on a cultural moment, translating it into measurable financial performance. The shift also highlights an opportunity for other family-run retailers - the recent closure of AAA Hobbies and Crafts after 70 years, for example, underscores the risk of not adapting to the evolving hobby landscape.

Regional revival: the Midlands as a craft hub

One rather expects the Midlands to be merely a footnote in a London-centric retail narrative, yet the data tells a more nuanced story. Hobbycraft’s 2023 annual report showed that the Midlands contributed 42% of total store revenue, up from 35% in 2021. This regional uplift is linked to three interrelated factors.

1. Store-level investment. In early 2023, Modella Capital allocated £12 million to refurbish 25 Midlands stores, introducing interactive workshop spaces and dedicated “kids craft” corners.
2. Local partnership programmes. Hobbycraft partnered with community centres in Wolverhampton and Dudley to run free crafting workshops, a move that not only built brand affinity but also drove repeat visits.
3. Supply-chain optimisation. By consolidating distribution through a central hub in Stoke-on-Trent, the retailer reduced delivery times to Midlands stores by 15%, ensuring shelves remained stocked with the latest kits.

These actions produced a tangible outcome: the average sales per square metre in the Midlands rose to £1,250 in 2023, compared with £950 in the South East. A senior manager at Hobbycraft’s logistics arm, who I spoke with at the company’s annual suppliers’ day, explained that “the Midlands’ lower operating costs and strong community ties gave us the breathing space to experiment with new product ranges without jeopardising profitability”.

The impact on consumers is evident. Families in Selly Oak now have access to “budget-friendly crafting” bundles that include everything from crochet yarns to model-making glue, all priced under £20 - a value proposition that resonates strongly during the back-to-school period and the lead-up to Christmas.

From a strategic viewpoint, the Midlands success provides a template for other regional retailers. The case study aligns with FCA filings that show a higher survival rate for firms that diversify their geographic footprint beyond the capital. In my experience, the lesson is clear: a focused regional strategy, underpinned by community engagement, can be a catalyst for national resurgence.

Consumer benefits: value, kits and the festive market

For the everyday shopper, Hobbycraft’s turnaround translates into more choice and better value. The retailer’s promotional calendar now features “Holiday arts kits - the most valuable thing for a family night”, a tagline that encapsulates the brand’s positioning as a provider of affordable, high-quality craft experiences.

Data from the retailer’s loyalty programme shows that members who purchase a "kids craft kit" are 1.8 times more likely to return within six weeks, suggesting that the kits succeed in fostering repeat engagement. Moreover, the average basket size for customers buying Christmas deals has risen from £38 in 2021 to £46 in 2023, reflecting the success of the “budget-friendly” messaging.

From a broader market perspective, the shift towards value-oriented kits mirrors the inflation-adjusted consumer sentiment captured by the Office for National Statistics, which indicated a 4% rise in discretionary spend on “leisure and recreation” in the past year. By offering “best value for money” products, Hobbycraft is effectively capturing a slice of that growing pot.

One anecdote that illustrates the impact comes from a mother I met in the Merry Hill store. She told me that she had previously spent £70 on assorted craft supplies for her children’s school projects; after discovering the new "Christmas deals" bundle, she saved £30 while still receiving a comprehensive set of materials. Such stories reinforce the notion that the retailer’s pricing strategy is resonating at the grassroots level.

In my view, the most valuable takeaway for consumers is the renewed focus on curated kits that eliminate the guesswork of selecting individual items. Whether it is a crochet starter set or a model-making kit, the packaging now promises a complete, finished product - an assurance that many families find compelling in an era of increasing price sensitivity.

Future outlook: lessons for family-run retailers

Looking ahead, the question remains whether Hobbycraft’s early CVA exit is a one-off success or a harbinger of a more resilient business model for UK hobby retailers. The evidence suggests the latter.

Firstly, the integration of community-focused workshops has generated a measurable uplift in footfall, a tactic that could be replicated by other family-run stores seeking to differentiate themselves from online giants. Secondly, the strategic emphasis on screen-free product categories aligns with a demographic shift towards experiential consumption - a trend that the FCA’s recent supervisory statements highlight as a key growth driver for small-to-medium enterprises.

However, challenges persist. The closure of AAA Hobbies and Crafts after 70 years serves as a cautionary tale: legacy retailers that fail to adapt to changing consumer preferences risk obsolescence. As a former FT staff writer who covered the demise of several independent retailers, I have observed that agility - both in product assortment and supply-chain responsiveness - is paramount.

For Hobbycraft, the next phase will involve consolidating its gains while navigating the competitive pressures from online platforms such as Amazon and Etsy. The retailer has signalled intent to expand its digital offering, launching an e-commerce portal that mirrors the in-store experience, complete with video tutorials and virtual workshops. If executed well, this omnichannel approach could cement its position as the go-to destination for “budget-friendly crafting” in the UK.

In sum, the Hobbycraft story underscores a broader lesson for the City and for investors: businesses that can marry cost discipline with a deep understanding of evolving consumer behaviours can not only survive but thrive, even in a sector traditionally viewed as niche.

Frequently Asked Questions

Q: How did Hobbycraft manage to exit its CVA ahead of schedule?

A: The retailer combined aggressive cost-saving measures, a refreshed product mix focused on screen-free hobbies, and targeted regional investment - particularly in the Midlands - to boost sales and profitability, enabling an early CVA exit.

Q: What role did screen-free hobbies play in the turnaround?

A: Sales of screen-free categories such as model-making, crochet and DIY jewellery rose by roughly 28% year-on-year, driving higher footfall and larger transaction values, which were key to the retailer’s improved margins.

Q: How significant is the Midlands region to Hobbycraft’s overall performance?

A: The Midlands contributed about 42% of total store revenue in 2023, up from 35% in 2021, and posted the strongest sales growth, largely due to store refurbishments, community workshops and supply-chain efficiencies.

Q: What benefits do consumers see from Hobbycraft’s new strategy?

A: Shoppers benefit from more value-focused craft kits, such as budget-friendly holiday arts kits, higher average basket sizes and curated product bundles that simplify the buying experience.

Q: What lessons can other family-run hobby retailers learn from Hobbycraft’s experience?

A: Key takeaways include the importance of aligning product ranges with emerging consumer trends, investing in regional store experience, and leveraging community-based programmes to drive footfall and loyalty.

In my experience, the Hobbycraft story is a reminder that even niche retailers can achieve a rapid, sustainable turnaround when they listen to shifting consumer preferences and act decisively at a regional level. The craft sector may appear modest, but its recent resurgence offers valuable insights for the wider retail landscape.