The owner of Hobbycraft is among a pack of suitors circling WH Smith, the 233-year-old high street chain which has been put up for sale.
Sky News has learnt that Modella Capital, whose executives have previously been involved in retailers including Paperchase and Tie Rack, is one of a handful of parties to have held discussions with WH Smith and its advisers.
The likelihood of Modella completing a deal to acquire the 500-store chain was unclear on Monday.
Modella’s executives include Steve Curtis, whose biography on the firm’s website describes his “successful transactions [as including] Jigsaw, Paperchase, Feather & Black, Rolling Luggage and Tie Rack”.
One of the firm’s investment advisers is Jamie Constable, a prominent turnaround investor who is associated with firms including Rcapital, Quilam Capital and Blazehill Capital.
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City sources said that WH Smith – which confirmed at the weekend that it was considering a sale of the business following a Sky News report – was keen to wrap up a deal during the spring.
The disposal would, if completed, leave London-listed WH Smith as a company focused on its more lucrative travel retail operation in airports, railway stations and hospitals, which comprises about 1,200 stores globally.
Modella is said to be bidding against a number of other experienced retail investors, including the Apollo-backed firm Alteri, which owns the Bensons for Beds chain.
WH Smith, which is being advised by bankers at Greenhill, declined to comment on Monday, while Modella has been contacted for comment.
A sale of its high street arm would mark a watershed moment for the UK high street, which first saw the appearance of the name in 1792.
The business, which specialises in selling items such as greeting cards and stationery, employs about 5,000 people across the country.
Run by Carl Cowling, chief executive, the disposal of its high street arm and repositioning as a pure-play…
