Matalan founder Hargreaves clashes with lenders over ownership

Matalan founder John Hargreaves is set to battle the retailer's lenders over its ownership ahead of a deadline for £350 million debt refinancing, according to Sky News.

Hargreaves, who returned to the fashion and homeware retailer as Chairman after a 15 year absence, has reportedly proposed a cash injection of tens of millions of pounds into the business. The funding would however be in exchange for his family retaining outright control of the company.

Whilst it is unclear how much the Hargreaves family is prepared to invest into the retailer, sources have suggested it could range between £25 million and £50 million.

However, some of Matalan's senior creditors were reportedly unconvinced by the proposal and were considering the sale of the retailer.

The Hargreaves family is being advised by Lazard, while Matalan’s senior lenders are being advised by Perella Weinberg Partners.

Matalan’s £350 million bond is due to be repaid in January while a further £130 million is scheduled for repayment a year later. In June, Matalan reported a rise in annual revenues from £744.1 million in 2021 to £1.03 billion.

Despite a rise in revenues, the company reduced its number of employees from 11,558 in 2021 to 10,837 in 2022, mostly across retail and distribution roles. Matalan also secured a £60 million revolving credit facility for up to 18 months to further strengthen its balance sheet.