Hilco closes in on Lakeland deal

Family-owned homeware retailer Lakeland is close to being acquired by high-street investment firm Hilco Capital, according to reports from Sky News.

Hilco, which has previously backed retailers including HMV and Superdry, could agree a deal in the coming days, according to insiders.

If confirmed, the deal 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 currently controlled by the three sons of founder Alan Rayner, and has been seeking tens of millions of pounds of new funding as it faces economic headwinds.

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.

It was revealed in January that the company had hired Teneo as financial advisers to help it explore options. PwC has been advising HSBC, Lakeland’s principal lender, which is expected to end its involvement with the company.

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”.

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 a £10m trade finance facility.