According to a report by Sky News, activist investor Elliott Advisors is currently in discussions with Matalan founder John Hargreaves regarding his bid to acquire the struggling fashion and lifestyle retailer. If successful, this deal would see Matalan joining the portfolio of British companies backed by Elliott, which already includes commercial property giant Hammerson.

Hargreaves, who recently returned to Matalan as executive chairman, is currently working with advisors from financier Lazard to explore options for the business. This includes finding a buyer or securing fresh investment to address Matalan’s urgent need to refinance its £350 million debt pile by January. While the company had £121 million in cash reserves as of May, the refinancing deadline is approaching quickly.

Matalan and Elliott have an existing connection, as the retailer previously secured a £60 million loan from Bantry Bay, in which Elliott holds a stake. This loan was intended to strengthen Matalan’s balance sheet in anticipation of the challenging retail landscape, which has been heavily impacted by inflation and the cost-of-living crisis.

Despite these challenges, Matalan has shown resilience in its performance. In a recent trading update coinciding with Nigel Oddy’s appointment as interim CEO, the company reported record revenues for the first half of fiscal 2023 and continued sales growth in the second quarter, both online and in-store. Sales in Q2 reached £286.4 million, up from £264.7 million the previous year, approaching the £292 million recorded in the pre-pandemic period in 2020. The update also highlighted Matalan’s “ongoing growth momentum.”

John Hargreaves expressed his confidence in the business, emphasizing his belief, passion, and commitment to maximizing growth potential and delivering value to customers through omnichannel strategies.

Matalan, which employs over 11,000 people, currently operates 230 stores in the UK and has a strong online presence. The company also runs more than 50 franchise stores internationally and boasts a customer base of 11 million worldwide.

Useful Links:
https://www.ft.com/companies/matalan
https://www.reuters.com/business/retail-consumer/matalan-owner-bid-matalan-founder-hargreaves-latest-chapter-2021-11-17/