Matalan founder ‘faces fresh tussle’ with lenders over control of company

Matalan founder and chair John Hargreaves is reportedly preparing for a tussle with lenders over the company's ownership ahead of a January deadline for refinancing 350 million pounds in debt.

Hargreaves, who founded the British fashion and homeware retailer in Liverpool in 1985, is looking to invest tens of millions of pounds into the company in exchange for his family retaining outright control of the business, according to a report by Sky News.

Though the exact figure is unclear, some City sources suggested it could be between 25 million pounds and 50 million pounds, according to the report.

But sources also added that some of Matalan's senior creditors were likely to be unconvinced by the proposal and instead would push for the company to be put up for sale.

One source close to the process said there has been no formal discussion over a sale and that lenders had not formally rejected Hargreaves' proposals.

Matalan declined to comment on the Sky News report on Saturday.

In July, Hargreaves announced he would return to Matalan after a 15 year hiatus to take on the role of chair, replacing Steve Johnson who has held the position since 2020.

In a statement seen by Retail Gazette, Hargreaves thanked Johnson and said: “Nobody could have predicted the pandemic or the more recent macro-pressures affecting the retail industry.

“Matalan’s navigation of these challenges, our market share gains and the top-line performance announced in our latest trading updates are testament to Steve’s leadership and our colleagues’ ongoing dedication.”

In its most recent trading update for the first quarter ended May 28, Matalan reported a 29 percent increase in revenue to 286.5 million pounds, while its EBITDA post adoption of IFRS16 came in at 44.4 million pounds, up from 41.8 million pounds a year earlier.