Full-price focus delivers for Matalan in Q1

By

Sandra Halliday

Published
Jul 10, 2017

Q1 delivered good news for UK value retailer Matalan as it bounced back from a revenue dip in the last financial year and proved that the full-price strategy behind that earlier fall is really starting to pay off.

In the 13 weeks to May 27, its full-price sales rose 21.5% and total revenue rose to £253.4 million from £250.1 million. Earnings on an Ebitda basis rose to £22.3 million from £16.2 million.

CEO John Hargreaves acknowledged that the company is seeing “a challenging market” with consumers facing tough times due to rising inflation and general economic uncertainty.

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But he added that Matalan is “well positioned” to benefit in such an environment.

He added that the company’s womenswear has had a “great season” with the firm’s investment in design paying off. Its new co-ordinated fashion and prints offer “performed extremely well and created a great reaction across social media,” he said.

But the firm’s stores have been important to its growth too. It has 227 UK stores and 25 franchise locations abroad. Hargreaves said the ongoing store refresh programme is “delivering very encouraging early results by offering customers more choice and an improved shopping experience” and will be continued through the rest of the year.

He also hailed the progress of Matalan’s online channel that is continuing to grow fast. This has been helped by the introduction of next-day click-and-collect with extended cut-off times for customers to place orders. The company has put major investment behind its online offer in recent periods and last year saw revenue rising over 60%. The company said last month that e-tail is bringing new customers into its orbit and promised a revamped website later this year.

But despite all the good news in its latest update, management is staying cautious as the business does not “expect the retail environment to improve in the near term.”