Matalan is in talks with a potential buyer for its casual clothing brand Lee Cooper. The value retailer, itself at the centre of takeover speculation, said it has received an approach that may lead to the sale of Lee Cooper. Matalan did not name the potential buyer, saying negotiations are at an early stage, with the other party "given a period of exclusivity to explore the opportunity".

The retailer said it will make a further announcement when a formal agreement is reached or discussions are discontinued. Last month, Matalan said it expected the jeans and casual clothing brand to make a first half loss of around £0.8m. Matalan sells the range in its own stores as well as wholesaling it across Europe, and said that Lee Cooper had continued to experience difficult trading, mainly in the French market.