Future of iconic homeware chain with 59 shops thrown into doubt after Budget tax raid fallout
THE future of an iconic homeware chain has been thrown into doubt following the fallout of Rachel Reeves’ Budget tax raid.
The retailer, which has 59 shops across all corners of the UK, is scouting out potential buyers.
Lakeland, which sells cooking and cleaning products as well as other home appliances, employs around 1,000 people.
The family-run business was launched 61 years ago and is now spearheaded by the three sons of founder Alan Rayner.
Now, the brothers have selected advisory company Teneo to help them navigate a potential sale, city sources told Sky.
Lakeland’s main lender, HSBC, is reportedly being advised by accountancy firm PricewaterhouseCoopers.
The company is headquartered in Windermere, Cumbria but has stores across England, Scotland, Wales and Northern Ireland.
It follows Reeves’ first Budget in October, which was dubbed “the most damaging for independent retailers in recent memory” by the British Independent Retailers Association.
The Chancellor controversially announced tax rises amounting £40billion – including raising the rate of employer National Insurance contributions.
This, alongside increasing minimum wage, has hiked costs for retailers and led some to raise their prices to absorb the increase.
Figures this month showed bosses had wasted no time in pulling permanent recruitment adverts, with December seeing the steepest drop in job vacancies in well over four years.
A closely watched report by KPMG and REC, compiled by S&P Global, shows the job market is already shrinking, with companies explicitly blaming the rise in employer national insurance contributions.
Some have been making redundancies in December, according to its survey of 400 recruiters.
As well as homeware businesses, supermarkets have also been hit – with fruit and veg prices at risk of soaring.
Two supermarkets, Sainsbury’s and Tesco, have even been forced to issue statements acknowledging the predicted hike.
Sainsbury’s CEO Simon Roberts told The Grocer that the chain would need to work with its suppliers to minimise the impact on customers.
He said: “Suppliers have got costs coming at them as well, of course, given all of the changes in National Insurance coming.
“We’ll be working really closely to make sure that between us, we find the best answers we can and we continue to give customers the best value that we possibly can.”
It is not the first supermarket to acknowledge the difficult times ahead – with Tesco boss Ken Murphy also promising to protect customers against the looming economic challenges, a sentiment also echoed by M&S CEO Stuart Machin.