Landlords are this week ratcheting up the pressure on businesses to pay rent during the lockdown by issuing winding up orders even against the likes of Poundstretcher and Matalan, who between them employ 14,000.
Matalan, the clothes retailer run by billionaire John Hargreaves that has more than 8,000 staff across 230 stores, has been blindsided by the writ from landlord Sheet Anchor Evolve.
Matalan is understood to have settled the debt following inquiries by The Daily Telegraph. Meanwhile, discount retailer Poundstretcher is fighting three separate claims from L&C Investments, Sheet Anchor Investments and Black Office. The company employs around 6,000 staff and operates 450 stores in the UK, most remaining open.
Owned by Malawi-born businessman Aziz Tayub, Poundstretcher was struggling before the Covid-19 pandemic. Accounts filed earlier this month revealed the company had swung to a pre-tax loss of £227,000 on more than £430m of sales for the year to March 31 2019.
Matalan declined to comment. Poundstretcher and the landlords did not respond to a request for comment.
The filing of a winding-up order is traditionally considered as a “last resort” by creditors. Courts do not look on it as an attempt to recover debts, but rather that the companies in question cannot pay their debts and should be liquidated.
The petition can be advertised on the official public record, The Gazette, nine days after being served on the debtor. At this point a company’s bank accounts are typically frozen, preventing it from continuing to operate. Even if the debt is repaid, other creditors can “piggyback” the process and continue the company’s winding up.