Matalan sales dampened by cost-of-living crisis and wet weather
The low-cost clothing and homeware chain saw its total revenues fall by 8% to £264 million in its first quarter.
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Your support makes all the difference.Fashion retailer Matalan has reported a “challenging” first quarter as the cost-of-living squeeze on spending and the slow transition to summer weather weighed on the group’s sales.
The low-cost clothing and homeware chain saw its total revenues fall by 8% to £264 million in the three months to May 27, compared to £287 million made in the same period last year.
Matalan, which has 230 stores across the UK and 48 franchised shops overseas, said it had noticed an impact from shoppers spending less on non-essential items.
The business had a challenging first quarter with cost-of-living pressure resulting in depressed consumer spending in discretionary categories
Chief executive Jo Whitfield said: “The business had a challenging first quarter with cost of living pressure resulting in depressed consumer spending in discretionary categories.
“Unseasonal weather delayed a refresh of wardrobes for early spring creating a tough start to the season.”
The company’s quarterly earnings before tax and other costs nearly halved compared to the previous year, from £44 million to £26 million.
However, sales ticked up by 6% year-on-year in June as the summer weather improved, and earnings jumped to £34 million in the five weeks to the start of July.
Sales in recent weeks were driven by in-store shopping amid a shift in demand away from online shopping, Ms Whitfield said.
The retailer also shifted to a new e-commerce platform, run by online retailer THG, which it said led to disruption during the quarter.
Matalan came under new ownership at the start of the year after a group of lenders took control from founder John Hargreaves, who set up the company in 1985.
The group, led by Invesco, Man GLG, Napier Park and Tresidor, took the reins of the fashion business after it launched a sales process in September.
Ms Whitfield said that business has started to see improvements “as the new leadership team came together” and it has its eye on improving profits in the years ahead.
Furthermore, the chain is planning to shake up its stock to sell more value items in the autumn and winter ranges, which it hopes will boost profits over the second half of the year.
Its full year earnings are expected to be between £60 million and £65 million.
Ms Whitfield said: “We are creating a much stronger Matalan, building on the assets the business has already around brand, customer loyalty and an engaged set of colleagues that want the business to thrive.”