Matalan could be put up for sale next year with a £1.5bn price tag, it has been reported.

A sale of the discount fashion chain would net hundreds of millions of pounds in profits for founder John Hargreaves, who took the business private in an £827m deal three years ago.

The Sunday Times said sale plans were at a preliminary stage but that Matalan boss Alistair McGeorge had held several meetings with advisers to discuss strategic options for the chain.

The group, which has 203 outlets, recently signalled the start of an expansion drive after concluding there was “significant scope” for new stores in the UK.

It has also invested £16 million in store refurbishments in the last financial year, with a similar figure expected this year. More than 120 stores currently meet the new standard, with better visual merchandising and store navigation.

Matalan’s operating profits reached £102m in the year to February 28, up from £89.4m a year earlier.

Mr Hargreaves opened the first Matalan store in Preston in 1985, taking inspiration from low-price, out of town retailers in the US.