Subscribe to the daily newsletter.

Latest: Matalan’s lenders take ownership of business

Matalan

Matalan’s lenders have taken ownership of the value retailer in a deal that will end John Hargreaves’ control of the chain he founded almost 40 years ago.

Invesco, Man GLG, Napier Park and Tresidor have agreed to cut the group gross debt by £257m to £336m as part of an equity exchange, and agreed up to £100m in new growth funding as part of the deal.

The transaction should help safeguard the future of the discount clothing and homeware retailer, which employs about 11,000 people across around 250 stores.

Stephen Hill, Matalan’s chief financial officer, said: “Matalan is a fantastic business and I am pleased that with the support of our First Lien Noteholders, its ongoing future has been secured via a materially lower level of debt and a reset balance sheet.

“As we transition to new ownership and having worked with John and the Hargreaves family for over 20 years, it would be remiss not to emphasise the contribution they have made to building the great business we have today and the many opportunities that lie ahead.

“On behalf of the Matalan team, I would like to express our sincere thanks and appreciation. It is clear in our third quarter and recent trading performance that whilst the market remains challenging, customers have demonstrated a strong affinity to our brand and proposition, evidenced from our robust and ongoing sales growth.

“However, the business must continue to adapt its approach to such market conditions, increasing its level of agility and margin resilience.”

Hargreaves founded Matalan in 1985 and grew the Liverpool-based business into a national chain. In recent years it has struggled to keep pace with the rise of online shopping and currently carries around £600m gross debt.

Several rescue bids have been mooted in recent months, including from Hargreaves himself, but none proved acceptable to debtors.

Discussions are reportedly underway over the appointment of a new chair to replace restructuring expert Paul Copley, who has led the board in recent months during the recapitalisation process, as well as the future of interim CEO Nigel Oddy.

Subscribe to the Prolific North Daily Newsletter Today!

Want all the latest content from Prolific North delivered direct to your inbox daily? Of course you do!

Related News