Matalan bosses looking at sale

Oct 5 2009 by Iain Laing, The Journal

DISCOUNT clothing chain Matalan may be put up for sale next year with a £1.5bn price tag.

A sale would net hundreds of millions of pounds in profits for founder John Hargreaves, who took the business private in an £827m deal backed by £410m of debt three years ago.

Analysts say sale plans were at a preliminary stage but that Matalan boss Alistair McGeorge had held several meetings with advisers to discuss strategic options for the chain.

The group, which has 203 outlets, recently signalled the start of an expansion drive after concluding there was “significant scope” for new stores in the UK.

It has also invested £16m in store refurbishments in the last financial year, with a similar figure expected this year. More than 120 stores currently meet the new standard, with better visual merchandising and store navigation.

Matalan’s operating profits reached £102m in the year to February 28, up from £89.4m a year earlier.

Mr Hargreaves opened the first Matalan store in Preston in 1985, taking inspiration from low-price, out of town retailers in the US. By 1995 there were 50 stores across the UK.