Hobbycraft carves a niche

Hobbycraft is side-stepping the difficulties faced by the vast majority of retailers and is in fact posting some impressive growth figures along with bold expansion plans. Katie Roberts spoke to MD Chris Crombie to find out more?
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The US craft retail business model was the basis for the Hobbycraft stores when the idea was developed in 1995. The idea was to create arts and crafts superstores on retail parks, covering 7,000 to 10,000 ft, housing 35,000 products and catering for 250 creative activities.

As Europe's first, and the UK's largest, chain of dedicated art, craft and hobby superstores, the retailer offers both branded and generic, own-label ranges across a wide range of pursuits; from knitting to cross-stitch, painting to framing and card making to model making.

MD Chris Crombie explains: “We haven’t ruled out opening smaller High Street stores. There are a lot of opportunities to open the current model in towns where we don’t have a presence, and there are certain big cities, for instance, where a High Street store may be relevant.”

For the time being, however, the out-of-town experience appears to be ticking consumers’ boxes and sales are performing incredibly well. In the ten months to January 4th this year, HobbyCraft’s pre-tax profits rocketed by 122 per cent to £6.1 million. Total sales jumped 10.1 per cent to £57.3m in the ten-month period.

Many explanations can be attributed to the company’s success. Before its launch, craft shops were small, offering a limited selection of products and were designed to cater for specialists.

Crombie explains: “HobbyCraft wanted to make their offer more accessible and less intimidating, creating a one-stop-shop for all participants of the arts and crafts market. The stores have a mass-market appeal, catering for generalist and specialist consumers alike.”

Moreover, the recession appears to be affecting the retailer in a positive way: “HobbyCraft is weathering the current economic downturn well and believes the recession is contributing to robust sales. People are spending more time at home, and HobbyCraft benefits from that. Customers are looking at low-cost things to do and craft is a low cost leisure activity.”

Crombie continues: “We don’t see HobbyCraft’s success waning when the country exits recession as people are still discovering us for the first time, there is a lot of growth left in the market, and will be for many years.”
The first was opened in Bournemouth and started trading on August 26th 1995.

Today the retailer has 38 stores nationwide and the firm has now exchanged contracts on its 39th and 40th UK stores in Edinburgh and Peterborough respectively.

Crombie explains the plan: “HobbyCraft has opened four to five new stores each year for the past four years and intends to continue growing at this rate. For site selection, the company uses an ACORN geo-demographic profiling model produced by CACI. Using this model we are able to identify target towns and cities across the UK, which would support a HobbyCraft store.”

In addition to its bricks and mortar business, the firm is expanding online. In December 2008, it launched an online shop on its existing website platform, www.hobbycraft.co.uk.

“The purpose behind this was to increase the presence of HobbyCraft by reaching customers who live too far from a store, as well as to increase the frequency of using HobbyCraft across all channels,” says Crombie.

The online shop will eventually carry over 10,000 SKUs with thousands of products being added every week. Various promotions are being put in place to drive website sales including a recent free delivery on orders over £25.

Further marketing initiatives are in place in the guise of free demonstrations in selected stores to support key trading periods. Crombie concludes: “The demonstrations add value for our customers, helping them to see and experience new products and inspire them to experiment with new ideas.”


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