The family behind Lakeland, one of Britain’s most prominent privately owned retailers, is exploring a sale after more than 60 years amid growing cost pressures sweeping the industry.
Sky News has learned that Lakeland, controlled by founder Alan Rayner’s three sons, has appointed advisers to assess the appetite of potential buyers for a deal.
Lakeland, which was established in 1964 as Lakeland Plastics, employs about 1,000 people in a chain of 59 stores, at its headquarters in Windermere and at its distribution centers.
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City sources said Friday the company had engaged Teneo as financial advisors, with potential bidders contacted in recent days.
PricewaterhouseCoopers, the accounting firm, was reportedly appointed to advise HSBC, Lakeland’s largest lender.
Like most retailers, Lakeland would face a significant hit to its finances following tax rises announced by Rachel Reeves, the chancellor, in it budget in October.
The National Employers Insurance increase, which comes into force in April, has sparked particular protests from retailers and hospitality businesses, with industry bodies warning the changes will be a tipping point for many employers.
Last week, the operator of Pizza Hut’s UK restaurants was saved Only after briefly falling into administration are looming tax hikes planned to wipe out half of next year’s profits.
J Sainsbury, the supermarket giant, said on Thursday it Axis 3,000 jobs As part of an accelerated transformation program partly due to its growing cost base.
The National Living Wage and changes to commercial property relief are also among the significant pressures facing the retail and hospitality sectors.
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Although the chancellor has signaled she is open to making changes to her proposals in areas such as the tax treatment of non-DOMS, she has ruled out changing her employer NICS overhaul.
Responding to a Sky News inquiry, a company spokesperson said: “Lakeland is one of the UK’s best-loved and most trusted brands.
“In response to the challenging retail environment, we are considering a number of options to ensure a sustainable, long-term capital structure, which builds on our sixty-year heritage as one of the world’s leading retailers. most innovative shutters in the UK.”
Lakeland was founded in 1964, when Mr Rayner started selling plastic freezer bags from his family garage in the Lake District.
It now sells more than 4,000 home and kitchen products.
The sales process is at a very early stage, with little indication at this stage on the identity of potential bidders or the structure of a deal.
Accounts filed at Companies House for 2023 warned that it entered that year “facing the toughest economic conditions for several decades with high inflation leading to a fall in many traditional categories”.
Sales during the year were largely flat at £153m, with Lakeland’s auditors warning of “material uncertainty…(roughly) the ability of the business to continue as a concern “.
The accounts added that it completed the renewal of its banking facilities with HSBC following the end of the financial year, including a £7.5m revolving credit facility expiring in May 2028 and a trade finance facility of £10 million.
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Andrew Griffith, the Conservative business secretary, said of the potential Lakeland sale: “This is a tragedy for British cooks and for the country.
“One of NI’s hikes, the family business ‘death tax’, business rates hike or union-inspired bill would be tough.
“All (of them) coming together is too much for even some of our oldest and most successful businesses.”