Today, Hobbycraft, the UK’s leading arts and crafts retailer, has marked a decisive return to profitability and rapid operational turnaround in its latest annual accounts for the 52 weeks ended 15 February 2026.
Statutory profit reached £8.7m, compared with a £10.1m loss in the previous year, while adjusted trading EBITDA more than tripled to £15.5m and like-for-like sales increased by 2%, propelled by a standout performance in the second half of the year where LFL sales surged by +4.0%. The business, owned by Modella Capital, will file its accounts with Companies House during the week commencing 9 November 2026.
Hobbycraft’s financial recovery follows the implementation of a comprehensive turnaround plan carried out by its executive management team and supported by its shareholder, including restructuring the store estate, reducing operating costs and improving stock management. These measures, underpinned by a powerful second-half rally and peak seasonal trading, enabled Hobbycraft to meet its restructuring milestones ahead of plan and exit its Company Voluntary Arrangement (CVA) on 25 June 2026, two years ahead of schedule.
FY26 Financial & Operational Highlights (52 weeks ended 15 February 2026)
- Adjusted trading EBITDA more than tripled to £15.5m (FY25: £4.8m), driven by cost discipline, one off restructuring efficiencies and profitable trading
- Positive like-for-like (LFL) sales growth of +2.0% (FY25: -4.3%), driven by an accelerating performance that saw second-half LFL sales surge by +4.0%, demonstrating the resilience and underlying strength of the continuing core store estate
- Total revenue of £210.4m (FY25: £215.9m), reflecting the restructuring of the store estate, which ended FY26 with 107 stores, compared with 124 a year earlier
- Trading gross margin sustained at 59.0% (FY25: 59.0%), underscoring solid pricing discipline and strong own-brand performance
- Substantial debt reduction, with drawn bank facility borrowings under the Asset-Backed Revolving Credit Facility (ABL RCF) reduced by £5.7m to £17.9m (FY25: £23.6m), alongside £7.9m in inventory reduction through disciplined stock management
- Record active Hobbycraft Club membership grew to 2.8 million (FY25: 2.7m), reaffirming exceptional customer loyalty and brand engagement
- Restructuring milestones completed ahead of plan, enabling the business to formally exit the CVA on 25th June 2026, two years ahead of schedule
Underpinning this commercial performance is a pronounced shift in consumer behaviour, which Hobbycraft is actively responding to by anticipating emerging interests and connecting customers with new creative opportunities. By recognising and tapping into growing demand for screen-free hobbies, mindful making and creative wellbeing, the business has driven strong trading momentum across key hobby categories, led by viral trends in model making and crochet, with sales increasing by 45% and 24% respectively over the past 52 weeks, compared with the previous 52 weeks. Hobbycraft has also capitalised on viral cultural trends to drive customer engagement, with online searches for Japanese pop-culture “Kawaii” crafting items jumping 221%. This growing appetite for therapeutic, screen-free pastimes aligns directly with findings from Hobbycraft’s Power of Making report with its key mental health charity partner, Mind, which highlighted that 8.8 million UK adults use crafting to support their mental health and 91% agree children should spend less time on digital devices.
Having stabilised the financial baseline, Hobbycraft has launched a forward-looking growth strategy focused on expanding market presence, enhancing channel versatility, and meeting evolving consumer habits:
- Refreshing brand and cultural positioning to establish Hobbycraft as “The Home of Creativity”, owning the hobby and craft space during a period of societal and lifestyle change where hands-on creation and wellness are central
- Piloting complementary retail formats, including the trials of three new garden centre locations and the continued rollout of strategic concessions, such as the Post Office partnership, to drive footfall and extend the reach of the store estate
- Capitalising on viral TikTok successes for the brand and key learnings from Hobbycraft TV by ambitiously expanding into social commerce, including the imminent launch of TikTok Shop and a focus on high-engagement, short-form vertical video to capture and convert new audiences
- Progressing high-potential commercial ventures, including evaluating international expansion opportunities (Ireland, Germany and Poland)
Graeme Campbell, acting chief executive officer at Hobbycraft, comments: “FY26 has been a pivotal, transformative year for Hobbycraft. While the retail sector faced continuing inflation and subdued consumer confidence, the decisive actions we took under our turnaround plan have right-sized our cost base, revitalised our core estate and returned the business to robust profitability.”
Graeme Campbell continues: “Achieving an exit from our CVA two years ahead of schedule is testament to the extraordinary commitment and passion of our colleagues across our stores, distribution centre, and head office. With our estate stabilised, debt reduced, and 2.8 million active Club members, we are energised to drive our growth strategy forward – positioning Hobbycraft as ‘The Home of Creativity’ and the undisputed leader in arts, crafts, and creative hobbies.”
Joe Price, chief executive at Modella Capital, said: “We are incredibly proud of the efforts and achievements of our dedicated colleagues across the country, in stores, the distribution centre and head office, in relaunching a refreshed and revitalised Hobbycraft proposition to customers across the UK. The management team, many of which have joined our family as part of this hugely successful turnaround, have delivered an amazing set of results and have much more to achieve, both in our home market and overseas. Our sincere thanks also go to the many stakeholders across the entire supply chain in supporting us through what has been a very busy last twelve months.”
