Cumbria retailer Lakeland hands control to management team, in deal funded by Hilco

Windermere-based family-owned household goods retailer, Lakeland, has undergone a management buyout for an undisclosed sum, funded by long time suitor, Hilco.

A management team, led by Lakeland CEO Catherine Nunn, has concluded the deal, which enables Lakeland’s family owners, Sam, Martin and Julian Rayner to formally retire from the 60-year-old business. 

As part of the agreement, including 58 stores, Hilco Capital has provided financial backing for Lakeland’s operating board to complete the buyout. This new long term capital funding structure will provide a foundation for the future growth and success of the business.

The newly formed board will be led by Catherine Nunn, who continues as Lakeland’s CEO having joined the business in 2016. Catherine will continue to lead the day-to-day running of the business, alongside chief financial and operating officer, Stephen Hill and chief commercial officer, Neil Piggot.

Founded in the heart of the Lake District in 1964, Lakeland has been owned by the three sons of its founder, Alan Rayner for more than 50 years.

Catherine Nunn said: “It’s been a great privilege to work alongside Sam, Martin and Julian since I joined the business nearly ten years ago. Their energy and commitment to our customers and colleagues is a shared passion, and one that I know will always belong at the heart of our business.

“Whilst it’s not easy to end such an important chapter of Lakeland’s story, I’m excited to look to the future and grow our business, working collaboratively with the team at Hilco Capital.”

From left: Sam, Martin and Julian Rayner

Sam Rayner said: “Looking forward and implementing the right funding model and foundation for the future of Lakeland has been extremely important to us. As we hand over the day-to-day management of Lakeland to Catherine, Stephen and Neil, we do so with confidence in their leadership and in the strength of the team around them.

“Though we are stepping away from the business, we will always feel deeply connected to Lakeland and look forward to seeing it thrive in the years ahead.”

He added: “It has been a tremendous journey and a privilege to work with so many dedicated and talented colleagues at Lakeland. I want to express heartfelt thanks to all those past and present who have contributed to the success of the business and helped shape its unique culture. And to our customers – thank you for your loyalty and support over so many years.

“We remain proud customers, and we know that the values that have long defined Lakeland will continue to be upheld by those who work there and care so deeply about what it stands for.”

Hilco Capital said: “We believe that Lakeland is a very special business, and we are excited to be supporting Catherine, Stephen and Neil as they move into a new era for the brand.

“The retail sector is a challenging space right now, and Lakeland hasn’t been immune to that. Nevertheless, we see huge potential in the business and a bright future. We look forward to seeing the business grow and develop in the years to come.”

Lakeland called in advisors from Teneo to seek a prospective buyer in January this year.

Among those in the frame to acquire the group were Modella Capital, which also owns Hobbycraft and Burnley-based The Original Factory Shop, and former HMV  owner, Hilco.

Alan Rayner set up the business in 1964 as Lakeland Plastics. He sold plastic bags for home freezing from his family garage.

It now sells more than 4,000 home and kitchen products.

The business employs 1,000 staff across its UK  stores and three stores in the Gulf states. Lakeland also operates a distribution centre in Kendal.

The three brothers retired from their operational roles in the business in 2020 and promoted Steve Knights to chief executive, formerly Lakeland’s commercial director.

It had been reported that Lakeland was seeking new funding running to tens of millions of pounds to tackle market headwinds, including a hike to its National Insurance bill this month.

A Lakeland spokesperson said in January: “In response to the challenging retail environment, we are 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.”

In the last set of financial results filed at Companies House, Lakeland reported a £1.95m loss on turnover of £153m and its auditors, RSM, warned of “material uncertainty… [about] the company’s ability to continue as a going concern”. 

In the accounts the company admitted it was “facing the most challenging economic conditions for several decades with high inflation leading to falls in demand for many traditional categories”.

Eversheds Sutherland advised Lakeland and the Rayner family sellers with a team led by Daniel Hall (corporate) and David Gray (finance) and including Philip Tunney (real estate) and corporate associates James Finney and Jonathan Edwards and Trainee Nicole Woo.