Matalan spring sales hit by weather and cost-of-living pressures
Matalan‘s total revenues fell by 8% to £263.6 million in the 13 weeks to 27 May after the clothing and homewares retailer was hit by the cost-of-living squeeze and cool spring weather.
In a trading update, the company said it had noticed that fewer customers were spending on non-essential items as the weather delayed spending on spring wardrobe items.
Meanwhile, Matalan’s restated EBITDA under IAS 17 came in at £2.1 million compared to £20.2 million at the same time in the prior year.
Jo Whitfield, Matalan chief executive, 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.”
However, trade picked up in the five weeks to 1 July with sales increasing by 5.5% to £122.5 million.
The company said its new leadership team had made an immediate positive impact which made it confident of a step change in year-on-year profitability in the second half of the year.
As a result, Matalan is expecting its full year EBITDA to be in the range of £60 million to £65 million, driven by a strengthened leadership approach and a wider transformation programme.
Whitfield added: “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.
“We are surfacing clear routes to value through operational improvements, margin enhancement and business transformation to enable growth and have a number of initiatives already running across the business to enhance performance and improve profits in the years to come.”
