Monro mulls return to discount retailer Matalan as its chief

The former chief executive of Matalan Angus Monro has not ruled out a return to the discount retailer he left five years ago after falling out with its founding chairman, John Hargreaves.

Speaking a day after he was ousted from Instore, the group behind the ex-Poundstretcher chain, Mr Monro hinted that he could be interested in a possible private-equity approach for Matalan.

Mr Hargreaves, who owns 53 per cent of Matalan, is known to be looking to offload his stake. He is back on friendly terms with Mr Monro and the pair are due to meet soon for dinner.

Mr Monro, who left Matalan in 2001 with £20m, said working at the Skelmersdale-based retailer had the advantage of being "local". Any return would have to be in the private arena as he said he was not interested in taking on another quoted company in trouble.

His comments came as Matalan, which is looking for a new chief executive, unveiled further evidence of poor trading.

In a pre-close update, the discount retailer said a dire performance from its home furnishings business was continuing to drag down sales.

In the 26 weeks to 25 February, like-for-like sales fell 7.4 per cent, continuing its weak performance over Christmas.

Clothing sales were 4.5 per cent lower on an underlying basis, although its gross margin moved ahead by 150 basis points.

Even including the benefit of new space, total sales were 5 per cent lower, putting the group on track to report a 30 per cent fall in annual pre-tax profits.