For sale signs could be raised at discount retailer Matalan

Knowsley-based out-of-town discount retailer, Matalan, is reportedly considering selling the business.

Weekend reports claim founder John Hargreaves is mulling a full sale, or attempting to secure new investors.

Matalan is facing a turbulent period as rising inflation and weakening consumer demand due to the cost of living crisis is set to hit the retail industry which is just about recovering from the impact of the pandemic. The business also faces the prospect of securing refinancing packages next year.

The business, which surpassed the £1bn revenues mark in the year to February 2022, must repay a £350m bond next January, while a further £130m instrument is scheduled for repayment a year later.

Last month the Hargreaves family shareholders floated the idea of injecting between £25m to £50m of their own funds into the business, which would ensure they retained overall control, but it was claimed some of Matalan’s senior creditors were unimpressed and could push for an outright sale of the company.

Weekend reports claim Mr Hargreaves, who returned to the board as executive chairman in July, is working with financial advisors at Lazard over options for the business.

In June this year the company secured a £60m revolving credit facility to strengthen its balance sheet.

Matalan declined to comment.

Mr Hargreaves, the son of a Liverpool docker, founded Matalan in 1985, from a market stall.

Revenues for the year to February 2022 increased from £744.1m in 2021 to £1.027bn – despite six weeks of enforced store closures at the beginning of the year – and pre-tax losses were significantly reduced from £131.5m last year to £7.7m. Exceptional items also fell, from £12.9m the previous year to £2.9m.