Matalan owner receives £250m payout

John Hargreaves, the founder of budget clothing chain Matalan, is paying himself a £250m dividend. The former Liverpool dock worker is getting one of the biggest ever pay-days after refinancing his firm. Matalan has announced that it has raised £525m from investors, after Mr Hargreaves abandoned attempts to sell the 200-store chain earlier this year.

The money will refinance existing debt facilities and "finance a distribution to shareholders", Matalan said.

It is thought that Mr Hargreaves and his family trusts are the sole owners of Matalan.

His bumper dividend is among the largest paid to an individual, though is still far less than the £1.2bn Sir Philip Green received in 2005. Sir Philip owns the Arcadia retail empire that includes Top Shop, Burton and Miss Selfridge.

Mr Hargreaves, 66, who lives in Monaco, opened his first Matalan store in Preston in 1985, eventually floating the business on the stock market in 1998. He took the retailer private in 2006 in a £827m deal backed by £410m of debt.

Mr Hargreaves tried to sell the business earlier this year. Media reports said private equity firms TPG, Advent and Warburg Pincus looked at the business but were not prepared to pay the £1.5bn asking price.

Matalan is an out of town retailer, committed to providing affordable products. The company aims to offer fashion and homewares at prices up to 50% below the equivalent High Street price.

By buying directly from the manufacturer and by being situated at low cost, convenient out of town locations, Matalan overhead costs are kept low and operating on lower margins Matalan is able to offer unrivaled value.

Image: Matalan Cherry Top