Matalan profits dented by ‘extremely tough trading enviornment’

Matalan has reported a drop in its revenues for the second quarter of the year, with CEO Jason Hargreaves citing “an extremely tough trading environment” and “awful Spring weather.”

For the 14 weeks ended 31 August, the British fashion and homeware retailer saw a 28.5 percent year-on-year fall in EBITDA to 16.3 million pounds. However, total revenue was up 11.3 percent to 292 million pounds compared to 262.4 million pounds for the same period the year before.

Commenting on the performance in a statement, Matalan CEO Jason Hargreaves, said: “In July we outlined the challenges that we and the wider market faced in what has been an extremely tough trading environment. The results released today reflect those challenges. Ongoing political and economic uncertainty has weighed heavily on consumer confidence and spending. Added to that, awful spring weather failed to improve until late in the summer, severely eroding the full-price sales potential of the season. This resulted in a significant margin investment being required to sell through surplus stocks, although positively the business has succeeded in doing this effectively.

“Despite current trading conditions, we are making good progress in a number of strategic areas. These include opening fantastic new stores, refurbishing our existing estate, and improving the customer journey in our online channel which delivered underlying growth of over 25 percent. As a result, we have consistently taken market share. Alongside this we continue to invest in improving our infrastructure, productivity and stock management capabilities.”

Moving forward, Hargreaves said he expects the autumn/winter season to remain challenging and is focussing on “balancing the delivery of growth opportunities against the need to effectively manage stock risk and profitability.”

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