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Lakeland, the family-owned homewares retailer, has become the latest takeover target for an investment vehicle which has rapidly become one of the industry’s most acquisitive investors.

Sky News has learnt that Modella Capital, owner of Hobbycraft and The Original Factory Shop, is among a small number of parties vying to acquire a controlling stake in Lakeland.

A sale process, which kicked off in January, has also drawn interest from Hilco, the former owner of HMV, retail industry sources said.

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Lakeland, which is controlled by the three sons of founder Alan Rayner, is understood to be seeking new funding running to tens of millions of pounds as it faces headwinds including the imminent hike to its national insurance bill.

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.

Sky News revealed in January that it had hired Teneo as financial advisers.

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At least one other bidder is understood to remain in the process.

PricewaterhouseCoopers, the accountancy firm, is advising HSBC, Lakeland’s principal lender.

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

It is also one of two remaining bidders for WH Smith’s high street retail arm.

Pepco’s decision to explore a sale of Poundland may also draw interest from Modella.

The increase in employers’ national insurance, which comes into effect early next month, has provoked protest from retailers and hospitality businesses, with industry bodies warning the changes will be a tipping point for many employers.

J Sainsbury, the supermarket giant, plans to axe 3,000 jobs as part of an transformation programme accelerated in part because of its growing cost base, while the chairman of JD Sports Fashion and the British Retail Consortium said this week that “every retailer” was looking at cost-cutting options.

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”.

Lakeland was founded when Mr Rayner began selling plastic bags for home freezing from his family garage in the Lake District.

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

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 £10m trade finance facility.

Modella and Hilco declined to comment.

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Coulthard and Humphrey-backed TV producer Whisper screens bidders

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Coulthard and Humphrey-backed TV producer Whisper screens bidders

The television production company founded by broadcaster Jake Humphrey and former racing driver David Coulthard is in talks with potential buyers about a sale.

Sky News has learnt that Whisper Group, which was established in 2010 and won a BAFTA for its coverage of the Women’s Euros in 2022, is working with advisers on a deal.

The company is said to be open to a range of options, including the sale of a majority or minority stake to either financial investors or a strategic buyer.

Corporate financiers at KPMG are orchestrating talks with potential bidders.

Whisper is already 30%-owned by Sony Pictures Television, which acquired the stake in 2020.

It replaced Channel 4’s Indie Growth Fund as an investor in the business.

A majority of the shares in Whisper are owned by its founders and management team.

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Lioness Millie Bright celebrates England's win at the Women's Euros 2022, the coverage of which was produced by Whisper. File pic: Reuters
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Lioness Millie Bright celebrates England’s win at the Women’s Euros 2022, the coverage of which was produced by Whisper. File pic: Reuters

The company is best-known for its sports productions, and is responsible for Channel 4’s Formula One coverage as well as international cricket, boxing and the Paralympics.

Whisper employs about 300 people, and has operations in London, Cardiff, Manchester and Riyadh.

Its chief executive, Sunil Patel, co-founded the producer alongside Mr Coulthard and Mr Humphrey.

It is said to be plotting further expansion in sport in the form of bigger events and rightsholders, as well as in events, where its clients include Red Bull.

Whisper is also focused on growing its presence in the US, where it currently works with Tom Brady’s Religion of Sport, and the Middle East, where it is partnered with Neom and Saudi Pro League teams.

Outside of sports rights, it has produced documentaries about Ben Stokes, the England Test cricket captain, and Sven-Goran Eriksson, the late England football manager.

It has also diversified into entertainment programming, producing the Wheel of Fortune gameshow hosted by Graham Norton.

Its most recent accounts disclosed a £4.3m pre-tax profit for the year to March 31, 2024.

“Whisper has successful diversified into factual, entertainment and events to complement the wider blend of work across its sports broadcast contracts,” it said in a statement accompanying the accounts.

“It has been another successful year for contract wins, with a series of renewals with key clients and a new range of significant projects which will help ensure visibility over the next few years.”

The sale process comes as ITV holds talks about a merger of its Studios arm with RedBird IMI-owned All3Media, one of Britain’s biggest production companies.

A combination of the two businesses could be announced during the spring, according to banking sources.

This weekend, a spokesman for Whisper declined to comment.

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WH Smith high street arm sold to Hobbycraft owner in £76m deal

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WH Smith high street arm sold to Hobbycraft owner in £76m deal

WH Smith has sold its 233-year old high street business to the owner of Hobbycraft in a £76m deal.

Sky News revealed in January how a sales process was under way for the arm, which employs roughly 5,000 people and has 480 stores.

Modella Capital won the final stage of the auction process in a run off against Alteri investors – both specialists in turning around troubled retailers.

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The deal will see the WH Smith name erased from town centres to become TGJones.

The sale allows the WH Smith business to focus fully on its lucrative travel retail arm.

That has around 1,200 stores, based mainly at airports and railway stations, in 32 countries globally and accounts for 85% of group profits.

Chief executive Carl Cowling said: “Given our rapid international growth, now is the right time for a new owner to take the High Street business forward and for the WH Smith leadership team to focus exclusively on our Travel business”.

There was no word on what the new owners may do to bolster profitability, with a question mark firmly hanging over employment and the store estate – often the subject of criticism over a perceived lack of investment.

WH Smith’s statement said: “All stores, colleagues, assets and liabilities of the High Street business will move under Modella Capital’s ownership as part of the Transaction.

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“Under this new ownership, the business will be led by Sean Toal, currently CEO of the High Street business. The High Street business will operate for a short transitional period under the WHSmith brand whilst the business rebrands as TGJones.”

The sale to Modella represents an enterprise value of £76m on a cash and debt-free basis but will see WH Smith secure an estimated £25m on a net basis after several costs associated with the sale are accounted for.

Shares fell by more than 1% at the open.

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Port giant DP World ‘discredited’ by former minister despite £1bn investment in London Gateway

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Port giant DP World 'discredited' by former minister despite £1bn investment in London Gateway

The chairman of P&O Ferries’ parent company DP World has told Sky News he went ahead with a £1bn investment in the UK despite feeling “discredited” by criticism from a cabinet minister.

P&O was widely criticised in 2022 when more than 700 seafarers were summarily fired and replaced by largely overseas workers without consultation.

Last October, the issue threatened DP World’s planned expansion of London Gateway, its deepwater port on the Thames Estuary, when the then transport secretary, Louise Haigh, described P&O as a “rogue operator”.

Her comments came as DP World was in the final stages of negotiating a £1bn investment in the port, due to be announced at the government’s investment summit.

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In response, DP World pulled the announcement and only relented following a personal intervention by the prime minister to keep his showpiece event on course.

DP World's chairman Sultan Ahmed Bin Sulayem
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DP World chairman Sultan Ahmed Bin Sulayem

Speaking exclusively to Sky News, Sultan Ahmed Bin Sulayem said the criticism was unexpected given the scale of his planned investment in the UK.

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‘Water under the bridge’

“There was a misunderstanding. Someone, unfortunately, said something that was not what we expected.

“We were going to invest in infrastructure, a huge investment, and then we get the person in charge to basically discredit us. But it’s water under the bridge.”

Bin Sulayem confirmed that he had spoken with the prime minister and received “reassurances” that Ms Haigh was expressing a personal view. She subsequently resigned after admitting a fraud offence.

The chairman also defended P&O’s conduct, saying that having received no state support during the pandemic, the cuts were necessary to save the company.

“We had a choice. We either close down the company and 3,000 people or more lose their jobs, or we try to survive by letting 700 or so go. And we felt that was right,” he said.

“Maybe we didn’t follow the procedures, but most importantly, we compensated every employee with more than what the law said.”

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Rebuilding relations

File pic of DP World's London Gateway container port in Stanford-le-Hope, Essex. Pic: PA
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DP World’s London Gateway container port in Stanford-le-Hope, Essex. File pic: PA

Bin Sulayem was speaking on a flying visit to the UK intended to rebuild relations with the government, meeting investment minister Poppy Gustaffsen at London Gateway to discuss an expansion that will make the port Britain’s largest by volume and offering encouraging words about the UK’s attractiveness to investors.

“We believe in the UK economy, in its strength, and we believe the economic fundamentals are strong. That’s why we invested,” he said.

“The UK has the best stock market in the world. You have English law, and you have the best universities in Oxford and Cambridge. If we look to the future, it will be the economy of the brain, not the economy of the hand.

“The world economy doesn’t want labourers, it wants brains. People want engineers. They want free thinkers. They want innovators. That is what’s here, and that’s why we invested in London Gateway.”

DP World's chairman Sultan Ahmed Bin Sulayem
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Sky’s Paul Kelso with Bin Sulayem

Tariff trade trouble

With ports and logistics operations in more than 70 countries handling around 10% of global trade, DP World’s chairman has a unique insight into global trade and the likely impact of the tariff war sparked by Donald Trump.

While confident that trade will find a way to navigate the disruption, he warned America’s trading partners to take the president seriously.

“I think psychologically it will [have an impact], but in reality it will not, because trade is resilient. I think of it like water coming from the mountain in the rain, nobody can stop it. If you can’t sell a product in one place, you can sell it somewhere else.

“Trump is a deal maker. He is making threats because that’s the way he negotiates. He comes with impossible demands because he wants people to come to the table.

“But he’s serious. He will do what he’s threatening if nobody makes a deal.”

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