Discounter focuses on stock and stores
Matalan added to the gloom on the high street today, revealing a drop in first-half sales of 1.8 per cent in the 26 weeks to August 27. Like-for-like sales plunged by 6.4 per cent.

However, margins increased, by 1.2 per cent, reflecting a more profitable sales mix and an improved currency position.

The retailer said: 'We set our agenda at the beginning of the year to focus on improving margins and cash flow and maximising efficiencies within the business, while continuing to invest in our stores. Working capital management remains a big focus - we have tightened stock levels and reduced exposure to terminal markdowns through a satisfactory clearance of spring/summer merchandise.'

Matalan completed 18 store refurbishments during the period, and initial results met its minimum requirement of a 5 per cent sales uplift. A further 17 stores will be refurbished in the second half.

The retailer rationalised its distribution network during the period, by closing a centre at Winwick last month and opening one at Corby, which serves 80 stores.

Matalan has also completed a full review of its cost base and expects to make annual savings of up to£15 million.

Chief executive John King said: 'The measures undertaken have enabled us to keep the business in good shape during a difficult six months in UK retail. The business is more streamlined as a result of tighter cost control and improved cash flows, and our stock position has been carefully managed.'

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