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Homewares retailer Lakeland has become the latest takeover target of retail investor firm Modella Capital, Sky News has revealed.
The investment firm, which owns Hobbycraft and The Original Factory Shop, is among a small number of parties trying to acquire a controlling stake in Lakeland.
According to retail industry sources, a sale process, which kicked off in January, has also drawn interest from Hilco, the former owner of HMV.
The homewares retailer is understood to be seeking new funding running to tens of millions of pounds before next month’s increases in National Insurance contributions.
Modella’s potential acquisition of Lakeland aligns with its ongoing efforts to reduce costs and restructure operations at both Hobbycraft and The Original Factory Shop.
Additionally, it remains one of the two final bidders for WH Smith’s high street retail division.
Founded in 1964 as Lakeland Plastics, the company has a workforce of approximately 1,000 employees across nearly 60 stores, its Windermere headquarters, and its distribution centers.
In January, Sky News also reported that the company had appointed Teneo as its financial adviser.
Financial records submitted to Companies House for 2023 cautioned that the company began the year “facing the most challenging economic conditions for several decades with high inflation leading to falls in demand for many traditional categories.”
A Lakeland spokesperson told Sky News in January that it was “considering a number of options to ensure a sustainable and long-term capital structure, which builds on our 60-year heritage as one of the UK’s most innovative homeware retailers”.
