Matalan first quarter sales down 72% after Covid posed ‘biggest challenge ever’
Matalan has reported that its revenue dropped by 72% to £75.3 million in its first quarter as the Covid-19 lockdown took its toll.
The 13 weeks to 30 May also saw the clothing and homewares retailer post an EBITDA loss of £10.2 million after the adoption of IFRS16.
Jason Hargreaves, chief executive of Matalan, said: “The results released today reflect the severity of the Covid-19 impact on our business this spring. The stores were closed throughout most of the first quarter as the UK endured lockdown in what has been without doubt the biggest challenge ever faced by the sector. The scale of revenue lost from our closed stores could not be offset by our smaller online channel which continued to trade throughout the quarter.”
After lockdown kicked in, the company took immediate action to preserve cash, manage working capital and reduce costs. It also accessed all available government support and drew down on its revolving credit facilities.
Matalan said its reopened stores have performed well as most are large in size and in out-of-town locations. The retailer said the lockdown period enabled it to speed up initiatives designed to make it more agile and efficient.
Looking ahead, Hargreaves said: “There can be no doubt that consumer uncertainty and broader economic challenges present a tough market going forwards. We remain confident though that whilst we proceed with caution, we have been successfully evolving our business model over recent years and as such are well placed to respond.”
