The owner of Hobbycraft, Modella Capital, is mulling a restructuring of the arts and crafts retailer, according to reports.

It is understood that Modella Capital, which is one of the two remaining bidders for WHSmith’s high street arm, is “exploring a restructuring” of Hobbycraft just seven months after it bought the chain in August last year.

Modella Capital has drafted in advisers from professional services firm FRP to “examine potential options including a company voluntary arrangement” (CVA), as reported by Sky News.

Sources said that the talks with FRP were at a “very early stage” and added that decisions about restructuring measures had not yet been taken.

The source added that “no substantive action would be implemented”.

Modella Capital and FRP declined to comment.

To date, Hobbycraft trades from 124 stores and employs around 2,400 people.

Hobbycraft parent Modella Capital remains one of two bidders left, alongside Alteri, for WHSmith’s high street arm following reports in January that WHSmith was looking to offload its high street business.

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