DBL Capital buys into Home Space Direct with funding

DBL Capital has completed a management buy-in of Home Space Direct, backed by a six-figure investment from NPIF II - FW Capital Debt Finance.

Additional funding came from LGC Industries, while the FW Capital-backed debt package will provide working capital for the Stockport-based online homewares retailer as it changes ownership.

Home Space Direct sells furnishings online and through marketplace channels including Debenhams and Tesco. Founded in 2007, the business says it draws on more than 40 years of industry experience.

The new ownership team is led by David Adamson, who has taken on the role of managing director. Funding will be used to streamline the company's supply chain and digital infrastructure from its Stockport base, and to expand its range of bedding, curtains and soft furnishings.

The investment comes from the Northern Powerhouse Investment Fund II, a £660 million fund covering the North of England. FW Capital manages the £115 million debt finance element of the programme on behalf of the British Business Bank, with loans ranging from £100,000 to £2 million for businesses in areas including Greater Manchester, Lancashire and Merseyside.

The transaction reflects continued investor interest in specialist online retail businesses despite pressure on consumer spending and intense competition across the UK homewares market. Backers aim to build on Home Space Direct's established marketplace presence while strengthening its direct eCommerce operation.

Adamson said the business would focus on investment in digital operations, customer experience and product development under the new ownership structure.

"Home Space Direct has built a strong reputation for offering quality homeware backed by excellent customer service, and we're excited to build on those foundations. With more than 25 years' experience growing leading retail and eCommerce businesses, I know the opportunity to grow the brand through continued investment in our digital platform, customer experience and product offering. Alongside strengthening our partnerships with leading suppliers, we'll also develop our own exclusive product ranges and explore carefully selected acquisition opportunities that complement the business and support our long-term growth ambitions. The investment from FW Capital gives us the platform to accelerate these plans, and we're excited about the future as we continue building Home Space Direct into one of the UK's leading online homeware retailers," said David Adamson, Managing Director of Home Space Direct.

Regional backing

NPIF II was launched as part of the British Business Bank's wider Nations and Regions Investment Funds initiative. The programme is intended to increase the supply of early-stage finance for smaller companies across the North and address gaps in access to funding.

For FW Capital, the Home Space Direct transaction adds another retail and eCommerce business to its regional portfolio. The lender said the management team is seeking to build a long-term model in the crowded home textiles segment.

"The new leadership team, led by David, is focused on scaling the company's eCommerce platform and building a sustainable, long-term growth model in the highly competitive home textiles sector. The team has lots of new ideas and a strong desire to grow the business further. It's fantastic to support the business during this critical period and provide investment that is helping it scale up," said Barry Wilson, Investment Executive at FW Capital.

The British Business Bank said the fund is designed to work alongside private investors as companies seek fresh capital for expansion. In this case, public-backed debt funding has been combined with investment from LGC Industries to support the buy-in and the next stage of development.

"Through the Northern Powerhouse Investment Fund II, we're proud to back well-established Northern businesses as they continue to grow and evolve, while working alongside private investors to unlock additional capital. Investing in businesses like Home Space Direct as they enter their next phase helps drive innovation through product development and technological advancement, which is crucial to creating forward-thinking, scalable businesses," said Sue Barnard, Senior Investment Manager at the British Business Bank.