Retail store closures have emerged as a growing concern on a global scale. The fluctuating global economy and evolving consumer preferences are affecting companies significantly, causing financial challenges that can lead to store closures for both well-established and newer retailers. However, some businesses are leveraging these challenging times, transforming struggling ventures into profitable assets.
Mondella Capital, a private equity firm, has been actively expanding its portfolio over recent years. It is recognized for acquiring and restructuring troubled retailers across the UK and Europe to restore them to growth.
Earlier this year, Mondella Capital acquired The Original Factory Shop, including its 180 stores and 1,800 employees, in February. Subsequently, in a £76 million deal, the firm acquired 480 high street stores from WHSmith, planning to convert them into new spin-off locations under the rebranded name TGJones. This transition is set to preserve approximately 5,000 jobs under the new management.
In August of the previous year, Mondella Capital purchased the UK-based arts and crafts retail chain Hobbycraft. Less than a year later, Hobbycraft announced on April 22 its intention to close at least nine stores across the UK by mid-July and reduce up to 126 positions as part of a restructuring effort initiated by the new owner. Hobbycraft CEO Alex Wilson expressed that the strength of their offerings has not shielded them from the challenges in the retail sector, and closing stores is a difficult decision but necessary to maintain operations nationwide.
These closures will impact not only the stores and their employees but also the staff at the company’s Bournemouth head office and Burton-on-Trent distribution center, though the exact number of affected jobs has not been disclosed. The stores set to close include locations in Bagshot, Surrey; Basildon, Essex; Borehamwood, Hertfordshire; Bristol: Imperial Retail Park; Canterbury, Kent; Cirencester, Gloucestershire; Dunstable, Bedfordshire; Epping Forest, Essex; and Lakeside Shopping Centre, Essex.
Further closures and job losses might occur, as 18 additional stores are under review. Negotiations with landlords are ongoing to determine the future of these locations. The closure of nine stores is part of a strategic decision intended to keep 99 stores operational, securing approximately 1,800 jobs. However, if negotiations with landlords are unsuccessful, it could result in the shutdown of up to 18 stores, affecting the jobs of over 150 employees.
A Mondella Capital spokesperson reiterated the firm’s commitment to physical retail amidst increasing sector pressures, stating their capability to restructure retailers when needed to ensure profitability and ongoing service to communities while retaining thousands of employees across the UK.
