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Matalan chief executive Alistair McGeorge to stand down

Matalan chief executive Alistair McGeorge is to stand down and other boardroom changes are expected at the value retail giant.

McGeorge’s departure comes just months after a refinancing of the business that enabled founder John Hargreaves to pay himself a £250m dividend following a failed attempt to sell Matalan.

Industry sources told Drapers that it is possible McGeorge will take a non-executive role at Matalan, potentially succeeding incumbent chairman John Mills.

Finance director Paul Gilbert is said to be a potential successor to McGeorge, but an external search is also under way.

The exact timing of any move is unclear but because retailers are now entering the crucial Christmas trading season it is likely that Hargreaves would want McGeorge to remain until the new year.

Matalan also recently lost buying director John Lyttle, who is jumping ship to Primark as chief operating officer, giving Hargreaves another reason to press for a stable leadership transition.

McGeorge has won the admiration of industry peers for improvements made at Matalan, such as store overhauls and openings, and for his key role in this year’s refinancing which raised a total of £500m. Source said he would now be well placed to “go plural” or take up chairmanships of private equity-backed retailers.

In July Matalan reported a 30% increase in annual profits, which it said was driven by investment in product, stores and people. Operating profit before exceptionals was £132.9m in the year to February 27, when total revenues rose 8% to £1.12bn.

The 205-store retailer said then it plans as many as 100 more shops during the next few years and will improve its etail offer. It had invested more than £12m in its existing stores and continued with international expansion with openings in Abu Dhabi, Dubai and Jordan.

One source said “He did a fantastic job to put Matalan in a position where it was able to raise £500m almost overnight.” Another said: “A lot of the changes he made have had a very positive effect.”

But one observer said that given the scale of debt injected in Matalan’s refinancing, “he might not fancy being around too long” as forecast tougher forecast trading conditions threaten to make life harder for store groups with high borrowings.

No comment was available from Matalan.

*Matalan’s retail director Amin Kassam is understood to have left the retailer after being suspended.  Details are unknown but there are not thought to be any wider business implications.

 

 

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