Hobbycraft profits plummet as revenue slips ahead of restructuring

Hobbycraft has reported a sharp fall in profits to £5.2m (FY24: £10.4m) as its sales also declined 1.1% to £215.9m in FY25. 

The group said operating losses increased largely due to a non-cash impairment of intangible and tangible assets and one-off costs linked to the sale of the business, which completed on 23 August 2024. 

For the 52 weeks ended 16 February 2025, LFL sales performance also decreased by 4.3% and online sales was down 5.7%.

However, gross margin edged up from 58.4% in FY24 to 59% in FY25.

Hobbycraft stated that these results relate to the period prior to the comprehensive restructuring conducted by Hobbycraft’s new owners which was agreed in May 2025. 

The process led to the closure of 18 loss-making stores as part of a wider turnaround. According to the company, “subdued trading conditions” and “persistent cost pressures” highlighted the need for the restructuring.

Alex Willson, CEO of Hobbycraft, said: “These results demonstrate why the restructuring and CVA were necessary to ensure that Hobbycraft can now prosper in the future. FY25 was a challenging year for retail in general, marked by subdued consumer sentiment and inflationary cost pressures, and Hobbycraft was not alone in feeling the impacts of this. 

“Following a detailed review of the strategy and financial position of the company, in May 2025, we implemented a CVA to improve liquidity and secure the long-term viability of the company and reviewed the store portfolio which had expanded significantly in recent years.  This resulted in the closure of 18 underperforming stores and a comprehensive cost reduction across the estate.”

He added: “We entered FY26 facing similar market conditions, but the business is now better positioned for the future. Our new strategy was launched at pace, and our colleagues have worked tirelessly to bring key initiatives to life, including the launch of Hobbycraft TV and the introduction of Post Office and Toys R Us concessions in our stores. Encouragingly, we achieved strong trading over the last four months and improved profitability, positioning the business for success as we approached the peak trading period.”

Joe Price, managing director at Modella, concluded: “Now the restructuring is complete, the positive initiatives brought in by Alex and the team are reaping rewards and we have seen stronger trading in recent months. Hobbycraft is a much-loved business and a strong brand, and we are delighted to be supporting the turnaround of the business in this way.”