Husband and wife Ross and Kirsteen Leventhal launched the business in 1993 with their first branch in Halifax, and now the Harrogate-headquartered company has 43 branches which specialise in home furnishings such as bedding, duvets and curtains.
The deal sees Ross and Kirsteen reduce their shareholding from 95 to 40 per cent, and divide the remaining shares between the management team, led by finance director Linda Shreeve.
Ross Leventhal said: “We are pleased to stay involved with the business as our exit will be phased over the next three years.
“There is a fantastic, loyal team here and, as a family business, we want to support them.
“The aim is to strengthen the existing business and then expand towards 100 stores over a five-year period.”
The deal was financed through company cash reserves along with a short-term loan from the Leventhals, and a new holding company, YLC Holdings, has been established.
Ross and Kirsteen Leventhal were advised on the transaction by Christian Hunt, partner at Langleys Solicitors in York.
Ross said: “We were grateful for the support of Langleys, which made for a seamless transition and ensured that we as a business did not take our eye off the ball.”
Christian Hunt said: “The Yorkshire Linen Company is a great retail success story for this region and we were pleased to help Ross and Kirsteen to secure a management buyout that opens up an exciting new chapter for the company.”