Matalan secures £25m investment for store upgrades as it aims to grow its ‘everyday style’ success

The clothing retailer’s investors have committed funding to revamp 40 stores and boost seasonal product investment

Clothing chain Matalan has obtained a £25m financial injection from its backers despite facing declining turnover and job losses last year.

The firm’s principal investor consortium – Invesco, Tresidor, Man Group and Napier Park – have pledged the capital to accelerate the retailer’s ambitions to modernise its outlets.

The financial boost arrives despite the retailer shedding nearly 200 positions and posting a pre-tax deficit of £67m last year, according to its latest Companies House documents as reported by City AM.

If utilised, the capital will be deployed to channel investment into Matalan’s merchandise, premises and online infrastructure. The company is pursuing a renewed emphasis on reinforcing its “everyday style” proposition, it said, as it attempts to expand its market position.

Matalan recently appointed a new chief executive, Henrik Nordvall, after the retailer’s former boss departed after fewer than two years at the helm.

The group said its store modernisation initiative is yielding results, after its third-quarter financial performance registered two per cent like-for-like sales advancement.

Matalan said its refurbished outlets outperform the remainder of the estate by 12 per cent.

The new capital will be deployed to transform a further 40 outlets and to enhance investment in seasonal merchandise to strengthen the retailer’s performance in crucial trading windows, it said. The retailer also received a £25m investment package from its backers last year, as part of plans to launch ten new stores annually.

Matalan’s investor group assumed control of the retailer in January 2023, marking the end of founder John Hargreaves’ involvement.

This transition saw the lenders reduce the group’s gross debt by £257m to £336m and agreed to up to £100m in new growth funding as part of the agreement.

The retailer was listed on the London Stock Exchange in 1998 and achieved a £1bn valuation, but was subsequently taken private by the Hargreaves family in 2006.

Matalan operates over 200 stores globally and serves 11 million customers each year.

Henrik Nordvall, CEO of Matalan, stated: “This commitment to providing additional funding reflects the confidence of our anchor investors in both the business and our strategy, as well as the strong strategic progress we have made and the growing momentum in the business. “.

“We’re investing for growth and seeking to increase the pace of that investment in the areas we are seeing the strongest returns, including our stores and product offer, as we continue to strengthen our proposition around great style, quality and value and grow our market position.”