King intends to leave the company in December but will stay on pending the appointment of a successor and then return to work in the US.
His departure has stoked the rumour that there have been tensions between King and Matalan chairman John Hargreaves. Investec analyst Mark Charnock said that King's departure could pave the way for an MBI and for Hargreaves to look at selling out his majority holding. He added: 'Whether there is a queue of buyers for Matalan is a moot point, but today's news may help to flush them out.'
Seymour Pierce analyst Richard Ratner added: 'It looks as if King is going of his own volition, which is a clear indication of where he thinks the business is going - a serious loss as he is a very sound operator. However, in an overcrowded value market, we believe Matalan is being bypassed by the customer - will the last member of staff to leave please remember to turn off the lights!'
King joined the Matalan board in March 2003 from Delta US, where he was chief operating officer.
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