A HUGE update has been issued on the future of an iconic homeware chain that’s been searching for a new owner.
Hilco Capital, the ex owner of Homebase and HMV, is poised to takeover over Lakeland, according to Sky News.
Lakeland, which sells over 4,000 kitchen and home products, has been searching for new funding in the tens of millions of pounds to navigate challenging economic conditions, including increased national insurance costs for employers.
The retailer, employing roughly 1,000 people across nearly 60 stores and several distribution centres, hired financial advisors earlier this year to explore options.
The family-run business was launched 61 years ago and is now spearheaded by the three sons of founder Alan Rayner.
The brothers selected advisory company Teneo to help them navigate a potential sale back in January 2025.
This potential takeover comes after months of discussions with various potential buyers, including Modella Capital, which recently acquired WH Smith’s high street shops.
Lakeland’s main lender, HSBC, is expected to end its relationship with the company following the buyout.
The retailer was founded in 1964 as Lakeland Plastics by Alan Rayner, who began by selling plastic bags from his garage.
The company is headquartered in Windermere, Cumbria, but has stores across England, Scotland, Wales and Northern Ireland.
Like many businesses, Lakeland now faces higher employer national insurance contributions, which have risen from 13.8% to 15%.
Additionally, the threshold at which these contributions must be paid has been lowered from £9,100 to £5,000.
[bc_video account_id=”5067014667001″ application_id=”” aspect_ratio=”16:9″ autoplay=”” caption=”Why are so many pubs and bars closing?” embed=”in-page” experience_id=”” height=”100%” language_detection=”” max_height=”360px” max_width=”640px” min_width=”0px” mute=”” padding_top=”56%” picture_in_picture=”” player_id=”default” playlist_id=”” playsinline=”” sizing=”responsive” video_id=”6352178578112″ video_ids=”” width=”640px”]These changes to the tax system were confirmed by the Chancellor in the Autumn Budget last October and came into effect on 1 April.
At the same time, the national minimum wage saw a notable increase, rising to £12.21 per hour. For workers aged 18-20, the minimum wage increased by £1.40 to £10 per hour.
[authenticated-scripts src=”%3Cscript%20class%3D%22palin-poll%22%20src%3D%22https%3A%2F%2Fwww.thesun.co.uk%2Fpollingwidgets%2Fv3%2Fwidget.js%3Fquestion_id%3D112294%26game%3Dpolling%22%3E%3C%2Fscript%3E” type=”embedded” width=”100″ /]In January, a Lakeland spokesperson stated that the company 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”.
Hilco and Lakeland has been contacted for comment.
HARSH CLIMATE
Today’s development is indicative of the harsh retail climate which has plagued high streets up and down the UK in recent years.
Rising costs, coupled with shoppers tightening their purse strings, have placed pressure on businesses and damaged sales.
Bargain retailers such as B&M and Home Bargains have performed better than others thanks to their low price point, but this has created rivalry.
However, much like Lakeland, Poundland is also grappling with challenges to remain competitive in the market.
The discount retailer, owned by Pepco, enlisted advisory firm Teneo earlier this month to manage the potential sale of its business.
A significant number of stores could be axed as part of the proposed sale, reports say.
It comes after Pepco said it was looking at “all strategic options” to separate Poundland from its brand.
The Polish group said it might turn its focus to its more profitable businesses in Europe.
WHSmith sold off almost 500 high street shops last month, with up to 20 branches set to close in the coming weeks.
The sale of the stationery retailer to Hobbycraft owner Modella Capital cost £76million.
The move saved the jobs of roughly 5,000 employees.
However, the famous WHSmith name is set to be lost to the high street as the shops will be gradually rebranded to TGJones.