Hilco Reportedly Close To Lakeland Deal

It has been reported that private equity company Hilco Capital, the former owner of Homebase and money-lender to Wilko, is in advanced discussions with Lakeland and its shareholders regarding a potential management buyout.

Family-owned Lakeland was founded by Alan Rayner and is currently run by his three sons. They have been looking to secure funding in the tens of millions, ahead of increased taxation from this month and the challenges of a difficult trading environment.

In January, Lakeland reportedly appointed Teneo to identify a potential buyer and PwC was brought in to work with HSBC, Lakeland's principle lender. When it was initially reported that the business was up for sale, a Lakeland spokesperson said:

“Lakeland is one of the UK’s most loved and trusted brands.

“In response to the challenging retail environment, we are 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.”

Modella Capital - the owner of Hobbycraft and The Original Factory Shop - had also been rumoured to be in talks to acquire a stake in the business.

Lakeland is headquartered in Windermere and has a network of 59 UK stores, employing 1,000 staff.

Accounts filed at Companies House for the year ended 31st December 2023 revealed flat sales of £153m (2022: £154m). The business stated that it was "facing the most challenging economic conditions for several decades with high inflation leading to falls in demand for many traditional categories".  The report also confirmed that a £7.5m revolving credit facility, expiring in May 2028, as well as a £10m trade finance facility, had been renewed by HSBC.

Neither Hilco nor Lakeland responded to requests for more information from Sky News.

Source : Insight DIY 

Image : Lakeland

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