Lenders for Matalan are to take ownership of the fashion chain in a deal which will end founder John Hargreaves’ control of the retailer which originated in Preston.
It is understood the lenders did not believe any offers from the sales process adequately valued the business. Mr Hargreaves, who founded the company in 1985, attempted to put a bid together with Elliot Advisers to regain control.The lenders said they have cut the group’s debt by £257 million to £336 million and agreed up to £100 million in new growth funding as part of the deal.
Matalan said stock levels for the autumn “proved to be too ambitious and front-loaded”, resulting in £45 million extra inventory in September against the previous year. It said trade came further under pressure due to a “very slow start to the season as warm weather stifled demand and the cost of living crisis unsettled consumers”.