Matalan deal done but founder Hargreaves won’t be coming back
A long-awaited debt-for-equity swap which will save retailer Matalan has been confirmed – but founder John Hargreaves, who has been around the business for forty years, will not be part of the new management structure.
Hargreaves had tried to put a bid together with Elliot Advisers to take over the business.
But a host of debtors – including Invesco, Man GLG, Napier Park and Tresidor – have agreed a recapitalisation deal that the group says will result in £100m of new capital to “support delivery of our strategy and exciting growth ambitions.”
The deal will reduce the firms’s gross debt by more than £250m – leaving the debt pile at a more manageable £336m.
A source close to the Hargreaves family told the Sunday Times at the weekend the deal would lave the firm in the hands of inexperienced leadership.
Matalan chief financial officer Stephen Hill attempted to smooth over Hargreaves’ frustration today.
“As we transition to new ownership and having worked with John and the Hargreaves family for over 20 years, it would be remiss not to emphasise the contribution they have made to building the great business we have today and the many opportunities that lie ahead. On behalf of the Matalan team, I would like to express our sincere thanks and appreciation,” he said in a statement.
Matalan said the strategy would see the “ongoing developments of our stores, logistics network and website.”
Like many high street retailers, Matalan has faced a series of headwinds, compounded by the cost of living crisis and recessionary pressures.