Sarria noted that putting merchandise into its stores early in the season will increase commercial risk a little but stressed that this does not make Matalan the same as peer New Look.  Sarria added that the business is “coming out of its shell”, describing the strategy as a return to what Matalan should have been had it taken greater commercial risk in prior years.

“There is more to it than meets the eye, but the strategy makes sense and the new CEO should give us further confidence,” Sarria said.

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“Matalan are somewhat anti-cyclical and have a track record of outperforming in crises. Last time in 2009, before the cotton spike, CVC even came with a GBP 1.5bn bid at 10x,” Sarria continued. “It’s a great performance any way you look at it. The subs are 3.5x leveraged on our math and are par paper.”

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“This is a bet on control of the delta variant and if there is no control then they are in trouble – along with half the economy. Another lockdown would be tough but if the UK finally opens next month, then Matalan have all to play for,” independent special situations firm Sarria commented. “The second

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“Post pandemic this should be a GBP 80m-100m EBITDA company again and it's not overly levered on that basis,” Sarria continued. “Give it time and they will be alright. Nobody gains from pulling the plug. If you take a long term view, the first liens continue to be covered, but the second liens might be testing [shareholder and founder John] Hargreaves’ resolve one more time.”

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