Value retailer Matalan thrives in tough market

While some fashion retailers struggle to survive the challenging UK retail market, Matalan has quietly announced increases in total revenues, full-price sales and profits for the year to 24 February.


Matalan

The leading out-of-town family retailer saw total sales increase modestly from £1.04 billion to £1.06 billion during the period, but full-price sales jumped 11.7%, driven by improvements to its core and seasonal collections.

With 227 stores in the UK and a new e-commerce platform, the value company is attracting savvy shoppers with affordable prices and a wide offer. Trendy off-the-shoulder tops sell for less than £10 at the retailer, while a women’s rain mac will only set you back £30.

The accessible prices are acting as a strong selling point to consumers, who have tightened their purse strings in the face of economic volatility.

Meanwhile, operational efficiencies helped the company improve its profitability, with EBITDA reaching £104.5 million in the 12 months, compared to £77 million in the previous year.

CEO Jason Hargreaves said the business delivered “a strong year”.

“In what remained a volatile and challenging market, customers were savvy in seeking out true value. Our offer is well positioned, providing great design, quality and value across our ranges. We have also invested in improving the customer experience, starting a chain-wide store refurbishment programme and launching a new website, which delivered sales growth in stores and online growth of over 30%,” he said.

“Going forwards, we expect general market conditions to remain challenging and consumer confidence to be fragile for the foreseeable future,” said the chief executive, adding that the business remains cautious after seeing high levels of market volatility in the spring.

“However, we remain confident in our strategy and the growth levers we have in place. With the commitment and hard work of our great colleagues, I am confident we will continue to grow the business and outperform the market.”

Matalan completed a debt refinance in January to tackle its mounting debt pile. Its closing cash position post refinancing was £62.2m, versus £81.1m in the previous year.

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