Sweeping changes are underway at Matalan after the British chain appointed New Look’s former boss as interim CEO and its founder and board chair quit to bid on the newly up-for-sale retailer.
The company on Monday ended a year-long executive search when it named Nigel Oddy as its interim CEO effective Oct. 3, roughly three months after the House of Fraser and Marks & Spencer veteran vacated the top post at rival fashion chain New Look in June. Matalan cited his experience steering New Look through the pandemic while crediting his omnichannel knowhow and success boosting the retailer’s “mid-market fashion” relevance during his three-year tenure.
Founder John Hargreaves exited his board chair role to eliminate any conflicts of interest as he puts together a bid for Matalan, which also announced Monday it’s up for sale. Senior non-executive board director Tim Isaacs will temporarily fill in as interim chairman.
“Matalan is a business that has been in my DNA since the day I founded it in 1985,” Hargreaves said in a statement. “I am stepping down as chairman so that I can participate in the strategic sales process as a bidder. My focus and absolute commitment will remain to do what I believe is in the best interests of the company and all its stakeholders, in particular the 11,000 people we employ. My intention is to be instrumental in positioning the business for long-term success. I am delighted to welcome Nigel Oddy as the business’ new CEO and am confident Matalan is in good hands.”
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The 230-store retailer is seeking new ownership after it got key lenders to agree on a deal putting Matalan on stronger financial footing with 200 million pounds ($215 million) in pre-arranged financing. This group also is willing to give the chain another six months to pay up on 350 million pounds ($376 million) in notes that originally would be due in January. The lenders also voiced their backing of Matalan’s recapitalization plan “if required.” They committed to significantly cutting the retailer’s debt and moving a January 2023 debt due date to September 2027.
“Matalan’s Board is grateful to [these lenders] for their continued support of the Matalan Group, and in particular for the tangible actions they are taking to support the strategic sales process by offering a staple financing package and backstop undertakings to ensure Matalan has a sustainable capital structure with a lower debt amount which will allow us to deliver on our exciting growth opportunities,” the company said in a statement.
Matalan reported strengthening revenue for the fiscal 2023 second quarter for the 13 weeks ended Aug. 27. Revenue totaled 286.4 million pounds ($308 million) versus 264.7 million pounds ($285 million) in the same fiscal 2022 quarter but still off from fiscal 2020’s 292 million pounds ($314 million). Its balance sheet has unrestricted cash totaling 101.6 million pounds ($109.6 million), a sharp decline from fiscal 2022’s 173.0 million pounds ($186 million) but an improvement over fiscal 2020’s 73.3 million pounds ($79 million).