Matalan bolsters board as full-year profits fall

The fashion and homewares retailer reported a restated EBITDA of £80.3m in the 53 weeks to February 29,  a 21.5% decrease year on year.

Matalan recorded revenues of £1.129bn, a slight jump from the 2019 figure of £1.103bn. This marked a 2.3% rise year on year. Online was particularly strong, making up 24% of all sales.

Matalan chief executive Jason Hargreaves attributed the downturn in profitability to a tough consumer market, forcing the retailer to offer more markdowns in order to stay competitive and stimulate demand. 

He said: ”These results reflect the very challenging consumer backdrop, with spending remaining depressed in the midst of unprecedented levels of political uncertainty. The market became increasingly distressed in an attempt to stimulate demand, and we were required to be competitive in that regard. As a consequence, profitability was under pressure, as we also ensured that we exited the year in a clean stock position at the end of February.”

Hargreaves has recently come under fire for his reluctance to dip into his personal funds to inject cash into the company, instead opting to use £50m of  government-backed funding to help mitigate the impacts of the coronavirus pandemic.

Board appointments

Matalan has also made changes to its board with the appointments of Steve Johnson as chair and James Brown as chief commercial officer.

Johnson, who has held positions at Dreams and DFS, will take on his role on July 1, working alongside former chair John Mills to ensure smooth transition.

Brown will join Matalan as the newly created chief commercial officer on August 18. He previously worked for Shop Direct and Sainsbury’s, most recently as commercial director of general merchandise and clothing at Sainsbury’s.

‘Confident’ of recovery

Hargreaves said: ”While it is still early in the recovery phase, we are very clear on the key areas the business needs to deliver on in the months ahead. These include accelerating the review and rationalisation of our supply chain to improve efficiencies and create more agility. In addition, we will free up working capital by a much more efficient approach to stock management, utilising our investments in RFID.

”We are also accelerating the changes in our working practices and drivers of cost efficiency, and have already delivered rapid enhancements to our model during the crisis. For example, we are now actively fulfilling online orders from 75 of our stores, as well as our distribution centres. The pace of change required across the market to adapt to the current environment is evident and we are confident that we are well placed, and focused, to deliver against that need to quickly progress our recovery.”