Lakeland latest retailer targeted by Modella Capital

Lakeland has become the latest takeover target for Modella Capital, which owns Hobbycraft and The Original Factory Shop.

The firm, which is one of two remaining parties in discussions to snap up WHSmith’s 500 store high street business, is among a small group of potential suitors to acquire a controlling stake in the homewares chain, Sky News reported.

Lakeland is also thought to have drawn interest from former Homebase owner Hilco.

The retailer is understood to be seeking new funding worth tens of millions of pounds ahead of increases to employers’ National Insurance contributions next month.

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 60-year heritage as one of the UK’s most innovative homeware retailers”.

At least one other bidder is thought to remain in the process alongside Modella.

The firm’s interest in acquiring Lakeland comes as it explores cost-cutting and restructuring options at both Hobbycraft and The Original Factory Shop.

It is currently working with advisors at Interpath to explore options for TOFS, including a company voluntary arrangement (CVA).

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