Matalan remains confident on outlook despite fall in revenue

The fashion retailer posted revenue of £263.6m for the 13 weeks to May 27, 2023, down 8% year on year from £286.6m.

Matalan also posted revenue of £122.5m for the five weeks to July 1, 2023, up 5.5% from £116.1m for the same period last year.

The retailer posted EBITDA of £26.1m for the 13-week period and £33.6m for the five-week period respectively.

Matalan said cost-of-living pressures resulted in “depressed consumer spending in discretionary categories” and unseasonal weather caused a delay in spring/summer wardrobe shopping, which contributed to a “tough start to the season”.

In terms of outlook, Matalan said it has “reshaped” its trading plans with a focus on tightening stock commitments and shaking up its product offer in a bid to “improve value” across its autumn and winter collections.

Matalan chief executive Jo Whitfield said: “Building a strong leadership team to take the business forwards has been a key focus for me in my first three months in the role.

“I am really excited that the team are now in place and are bringing the strength of their impressive retail experience into play as we get moving on the opportunities to underpin profitable growth.

“They have landed with immediate positive impact and are upweighting our activities and focus across the business in areas such as design, ranging, sourcing, supply chain, people and omnichannel operations.

“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, as the new leadership team came together and the initial changes we have made started to take effect and the weather improved, we have been able through June to reduce the cumulative EBITDA gap to last year from £18.1m to £2.9m. We are also confident of strong year-on-year profit improvement across the remainder of the year.

“In addition to a challenging market backdrop, internal operational challenges created a gap to the market in the first quarter. We have two key areas of focus, those being driving our online channel and improving both product choice and the strength of our price position for customers.

“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.”