Would you buy a business from John Hargreaves? For the sake of clarity, that’s as much a compliment to him as it is a caution to others.

The Matalan founder, number 156 on The Sunday Times Rich List, has proved himself an astute retailer and canny deal-maker on successive occasions.

He was one of the first to see the potential of a value fashion offer through big sheds. It proved so successful he was able to float it in 1998 for almost £200m, after which it was a roller coaster share price ride until he took it private three years ago for just over £800m.

Clearly value had been created to attract that price tag, but Hargreaves’ eventual deal followed speculation that potential external buyers had baulked at the asking price demanded of them.

Is Matalan now worth £1.5bn? The word is that interested parties, including private equity powerhouse CVC, have been sniffing around and that’s the sort of price Hargreaves would want.

There’s no doubt big improvements have been made at Matalan. But if valued at £1.5bn on the London Stock Exchange, the retailer would be the 10th highest capitalised. Hargreaves is said not to be interested in another IPO, presumably because the public investors would not stump up that sort of cash.

So why should a private equity house? Any private equity deal is ultimately predicated on an exit, which would mean Matalan’s value would need to be turbo-charged again to deliver the return demanded.

That may be possible, but it’s a big ask – even if trading conditions return to pre-recession norms. Matalan, once so innovative, is no longer the only show in town. Primark shows no sign of relaxing its grip on the cheap chic market. New entrants such as Zara, and strengthened groups such as New Look and Peacocks, also represent fierce competition.

Matalan’s value will only be measurable by anyone allowed to do due diligence. Until Matalan’s worth is proven, £1.5bn sounds toppy.

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