Retail store closures are becoming a concerning pattern worldwide.
The unpredictable state of the global economy and changing consumer trends are impacting companies from all angles. Both established and emerging retailers can encounter financial problems that lead to store closures.
However, some companies turn these turbulent times to their advantage, recasting strugging businesses as lucrative assets.
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The private equity firm Mondella Capital has made multiple major business moves to expand its portfolio over the last few years. This firm is known for acquiring and restructuring troubled retailers across the UK and Europe to return them to growth.
Related: Iconic retail chain reveals dates and places for store closures
Just this year, Mondella Capital acquired The Original Factory Shop in February, along with its 180 stores and 1,800 employees.
The firm also sealed a £76 million (nearly $99 million) deal with WHSmith a month later to acquire 480 high street stores and turn them into new spin-off locations, which will be rebranded as TGJones. This will save the jobs of approximately 5,000 employees who will be working under the new ownership.
Hobbycraft to close multiple locations and axe jobs.
Image source: Geography Photos/Getty Images
Mondella Capital acquires an iconic retail chain and multiple closures follow
Modella Capital acquired the UK-based arts and crafts retail chain Hobbycraft in August of last year, and less than a year later, it has launched the awaited overhaul.
Hobbycraft revealed on April 22 that it plans to close at least nine stores in the UK by mid-July and axe up to 126 jobs as part of its new owner’s restructuring plan.
“Very sadly, the strength of our offering has not made us immune from the challenges faced by the retail sector in recent years,” said Hobbycraft CEO Alex Wilson. “Closing stores is always a last resort and this has been an extremely difficult decision. Making these changes is sadly a necessary action to enable us to keep our doors open to crafters up and down the country,” he added.
Related: Massive grocery chain shuts down in-house sit-down restaurants
Unfortunately, these closures will affect not only the stores and staff but also the future of employees at the company’s Bournemouth head office and Burton-on-Trent distribution center. However, Hobbycraft has yet to disclose how many jobs will be affected.
Here are all the locations that will be closing their operations forever, as reported by BBC:
Bagshot, SurreyBasildon, EssexBorehamwood, HertfordshireBristol: Imperial Retail ParkCanterbury, KentCirencester, GloucestershireDunstable, BedfordshireEpping Forest, EssexLakeside Shopping Centre, Essex
More stores may soon be shut down, putting jobs on the chopping block
More shutdowns and job losses may be on the horizon. The company has stated that 18 stores are currently under review, and negotiations with landlords are being conducted.
The decision to close nine stores is a strategic move to keep at least 99 stores open and secure the future of around 1,800 employees.
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However, if the negotiations with landlords are unsuccessful, up to 18 stores could be completely shut down, putting the jobs of over 150 employees at risk.
“Modella Capital is absolutely committed to bricks and mortar retail, at a time when the sector is coming under increasing pressure,” said a Modella Capital spokesperson to Sky News. “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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