Hilco Capital, a renowned high street investor, is on the verge of finalizing a deal to finance the acquisition of Lakeland, the family-owned homewares retailer. Sources have informed Sky News that Hilco, known for its support of retailers like HMV and Superdry, along with Lakeland’s management, is in advanced discussions with the company’s shareholders to take over the 61-year-old business.
Insiders suggest that a formal agreement could be reached in the next few days. If confirmed, this sale of Lakeland would come after extensive negotiations with various potential buyers, including Modella Capital, the firm that recently struck a deal to purchase WH Smith’s high street chain.
Lakeland, owned by the three sons of founder Alan Rayner, has been actively seeking substantial new funding as it navigates challenges such as the recent national insurance increase. Established in 1964 as Lakeland Plastics, the company operates nearly 60 stores and employs around 1,000 individuals across its head office in Windermere and distribution centers.
In January, Sky News reported that Lakeland had enlisted Teneo as financial advisors to explore strategic options. PricewaterhouseCoopers, the accountancy firm, has been providing guidance to HSBC, Lakeland’s primary lender, which is anticipated to discontinue its relationship with the company.
The rise in employers’ national insurance contributions has sparked backlash from retail and hospitality sectors, with industry associations cautioning that these changes could be detrimental to many businesses.
A Lakeland spokesperson stated in January that the company was evaluating several options to establish a sustainable and enduring capital structure, building on its six-decade legacy as one of the UK’s most innovative homeware retailers.
Lakeland originated when Mr. Rayner began selling plastic bags for home freezing from his family garage in the Lake District. Today, the company offers a diverse range of over 4,000 home and kitchen products.
Financial accounts for 2023, filed at Companies House, highlighted the challenging economic landscape the company faced that year, with high inflation leading to reduced demand in many traditional categories. Sales remained relatively flat at £153 million, with auditors cautioning about the company’s ability to sustain operations.
The accounts also mentioned the successful renewal of Lakeland’s banking facilities with HSBC post-year-end, including a £7.5 million revolving credit facility expiring in May 2028 and a £10 million trade finance facility.
A spokesperson for Hilco declined to provide a comment on Friday, while Lakeland has been approached for their response.
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The prolific high street investor Hilco Capital is closing in on a deal to fund a buyout of Lakeland, the family-owned homewares retailer.
Sky News has learnt that Hilco, which has backed retailers including HMV and Superdry, and Lakeland’s management are in advanced talks with its shareholders about a deal to take control of the 61 year-old business.
A deal could be formally agreed in the coming days, according to insiders.
If confirmed, a sale of Lakeland would follow months of talks with a number of potential buyers, including Modella Capital, the firm which recently agreed to buy WH Smith’s high street chain.
Lakeland is controlled by the three sons of founder Alan Rayner, and has been seeking tens of millions of pounds of new funding as it faces headwinds including the national insurance hike which came into effect this month.
Established in 1964 as Lakeland Plastics, the company employs roughly 1,000 people across a chain of nearly 60 stores, at its head office in Windermere and its distribution centres.
Sky News revealed in January that the company had hired Teneo as financial advisers to help it explore options.
PricewaterhouseCoopers, the accountancy firm, has been advising HSBC, Lakeland’s principal lender, which is expected to end its involvement with the company.
The increase in employers’ national insurance has provoked protest from retailers and hospitality businesses, with industry bodies warning that the changes represented a tipping point for many employers.
A Lakeland spokesperson said in January that it was «considering a number of options to ensure a sustainable and long-term capital structure, which builds on our sixty-year heritage as one of the UK’s most innovative homeware retailers».
Lakeland was founded when Mr Rayner began selling plastic bags for home freezing from his family garage in the Lake District.
It now sells more than 4,000 home and kitchen products.
Accounts filed at Companies House for 2023 warned that it entered that year «facing the most challenging economic conditions for several decades with high inflation leading to falls in demand for many traditional categories».
Sales during the year were broadly flat at £153m, with Lakeland’s auditors warning of a «material uncertainty…[about] the company’s ability to continue as a going concern».
The accounts added that it completed the renewal of its banking facilities with HSBC after the year-end, comprising a £7.5m revolving credit facility expiring in May 2028 and £10m trade finance facility.
A spokesman for Hilco declined to comment on Friday, while Lakeland has been contacted for comment.
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