// Matalan seeks £60m funding after closing over 200 stores
// The retailer hopes to survive through the coronavirus pandemic
Matalan is reportedly seeking £60 million to help it survive through the coronavirus pandemic after closing 232 stores.
The value fashion retailer, founded by John Hargreaves, is considering options to secure “short term funding” after stating that it has not faced “such difficult and unpredictable times” in its 35 years of trading, Mail on Sunday reported.
The retailer circulated a statement to its bondholders on Friday.
It said it had been forced to close 232 stores and had subsequently “bolstered its liquidity by drawing down fully against existing revolving credit facility having never before done so”.
The retailer has furloughed staff but continues to sell clothing online.
It added that it has “strong financial discipline” and prior to the pandemic, it had a “healthy level of liquidity”.
However, the outbreak resulted in a considered review of the need for further measures following the store closures.
Matalan also confirmed it was “exploring multiple options” in regards to funding. It has been seeking £60 million for the past week.
In recent weeks, some of the UK’s major retailers have seen their businesses being affected by the pandemic.
Lifestyle retailer Laura Ashley became the first coronavirus-linked high street casualty last month after its administration led to 268 job cuts, mainly affecting staff in its headquarters and back office roles.
Last week, department store chain Debenhams officially filed for administration, making it the second time within a year that it has taken this kind of insolvency process.
Debenhams said the decision to enter administration was aimed at protecting the business from the threat of legal action from creditors, which could risk pushing the retailer into liquidation while its 142 UK stores remain closed due to the government-mandated lockdown.
Meanwhile, Cath Kidston filed a notice of intention to appoint administrators last week as the Covid-19 crisis takes its toll on the retailer.
Billionaire businessman Hargreaves acquired Matalan back from shareholders in 2006 for £817 million.
In 2010, he paid himself a £250 million dividend after refinancing the firm with around £525 million of debt from bondholders.
Last year, he won a battle with HMRC after convincing courts an £84 million bill should not be paid.