The Daily Telegraph
Matalan searches for a buyer as retail downturn takes toll
THE founding family of Matalan has hoisted a “for sale” sign over the discount retail chain, as it grapples with the bruising conditions on the high street.
John Hargreaves has reportedly hired advisors from Lazard to find a new financial backer or a potential buyer for the 37-year-old business he founded as a market stall.
While Matalan secured underlying profits of £100m last year, the business has £350m of secured debt that falls due at the end of January.
The fashion retailer’s lenders, which are being advised by Perella Weinberg, are seeking £100m in fresh equity, according to The Sunday Times, which first reported the story. The company sealed a £60m revolving credit facility in June in an attempt to shore up its balance sheet to help weather the pressure caused by sliding demand.
Mr Hargreaves has reportedly offered to furnish the business with tens of millions of pounds worth of investment after becoming executive chairman in July. However, a court ruling found that the 78-year-old retail tycoon must pay a £135m tax bill on a share sale of £231m he made shortly after moving to Monaco in 2000.
The move comes as retailers are confronted by further woe on the high street driven by soaring inflation and mounting pressure on household spending power.
The average British household is poised to have its spending power slashed by £3,000 by the end of the year because of escalating energy bills caused by Russia’s invasion of Ukraine.
Such is the rise in energy bills that incomes will fall by as much as 10pc, according to the Resolution Foundation think tank, which has warned that 3m people could be plunged into poverty.
The challenge posed to retailers comes shortly after the pain inflicted on the high street by the pandemic and the ongoing shift towards online shopping.
Matalan, which employs 11,000 people and has 11m customers, trades from around 230 shops across the UK. It also has an e-commerce website and 50 franchise stores overseas.
Matalan, Lazard and Perella Weinberg have been contacted for comment.