Hobbycraft owner Bridgepoint is understood to be exploring a possible sale of the crafts business, which could lead to a loss of tens of millions of pounds.
The private equity firm has hired US investment bank Raymond James to explore strategic options for the retailer.
The review could result in Hobbycraft, which employs around 1,500 people across 119 stores in the UK, being put up for sale, The Sunday Times reported.
City sources said plans were at a preliminary stage and that there was no certainty of an auction.
Subscribe to Retail Gazette for free
Sign up here to get the latest news straight into your inbox each morning
They said the retailer may only fetch a fraction of the £100m that Bridgepoint paid for it in 2010, with a sale price of £60m to £70m.
The private equity firm has invested heavily into Hobbycraft, more than doubling the retailer’s store estate and strengthening its distribution network with a new warehouse in Burton, Staffordshire.
Sources said this was the first time Bridgepoint had explored strategic options for the business.
A spokesperson for Hobbycraft said: “Given the duration of Bridgepoint’s ownership we periodically review our options, however, as a business our focus is on continuing to delight our customers through expanding our offer, developing our online proposition, and opening new stores.”
Bridgepoint has been contacted for comment.
Click here to sign up to Retail Gazette‘s free daily email newsletter
