Matalan defies retail gloom with rising revenues
Rival retailers have been closing stores to save on costs.
Matalan has defied the gloom on the high street with rising revenues in the first quarter of its financial year.
For the 13 weeks ended May 26, the clothing retailer’s total revenues grew 5% from £253.4 million to £265.9 million. Online sales rose 39%.
Earnings before interest, tax, depreciation and amortisation were up 11% to £24.8 million.
Matalan chief executive Jason Hargreaves said: “Our first quarter represents a strong set of results. Good stock management, flexibility in our operating model and agility in our customer contact strategy helped us outperform a volatile market.
We are cautious in our outlook but confident that our strategy is delivering for customers which positions us well Matalan chief executive Jason Hargreaves
“Thanks to the hard work of our colleagues, we continue to deliver consistently for customers and can be pleased with our performance.”
He said he does not expect the UK’s retail environment to improve.
Retailers have been hit with costs from weaker sterling, alongside rising business rates and labour costs.
“Currency pressures on operating margins are ongoing,” he said.
“We are therefore cautious in our outlook but confident that our strategy is delivering for customers which positions us well.”
Mr Hargreaves took home £1.5 million last year after securing a successful refinancing package for Matalan, which has 227 stores in the UK.
Accounts filed at Companies House show that Matalan’s highest-paid director, thought to be Mr Hargreaves, earned a £900,000 bonus on top of a basic pay of £600,000.
Pre-tax profit for the year to February 24 more than doubled to £20 million, while total revenue rose 2.5% to £1.06 billion from £1.04 billion.
It is understood that the reward was tied to Matalan’s results, which were the best for seven years, and the refinancing of the retailer’s loan notes, which were maturing in 2019 and 2020.