Budget retailer Matalan struggles as high street proves tough even for low-cost stores
- Matalan revenues dropped 1.2% from the same period last year
- Sales were bolstered by the retailer’s online business which grew 25%
- Firm had £73.1m in cash at the end of 2019 compared with £91.2m in 2018
Budget retailer Matalan is the latest high street store to reveal lower revenue and profit.
Revenue hit £311.7million for the 13 weeks ending November 30, a 1.2 per cent drop from the same period last year.
The third-quarter results also showed that earnings before interest, tax, depreciation and amortisation fell by more than £6million to £33.7million.
Matalan is the latest retailer to report revenue and profit warnings as tough conditions prevail
It had £73.1million in cash at the end of the year, compared with £91.2million a year earlier.
It comes as high street shops are facing some of the toughest times in years, with shoppers buying less than in the past.
Over the five weeks to January 4, which includes the Christmas shopping period, but not Black Friday, sales increased 0.6 per cent to £134.3 million.
The British Retail Consortium said last year that September, which is part of the 13 weeks mentioned in Matalan’s report, was the worst on record.
Matalan chief executive Jason Hargreaves said: ‘The challenges faced by ourselves and the wider market have been well documented and our results released today continue to reflect that backdrop.
He added: ‘Consumer confidence and spending remained depressed in the midst of unprecedented levels of political uncertainty throughout the autumn/winter season.’
Mr Hargreaves said the company is starting to see results from the new initiatives it took to strengthen its stores.
He continued: ‘In the ever-changing landscape retailers are now faced with, it’s more important than ever to evolve and to be agile, efficient and deeply connected to our customers.’
Matalan has refurbished several of its stores and invested in its online business, which is growing by 25 per cent.
Mr Hargreaves said: ‘Despite remaining cautious in a tough market, I’m confident that, with the support of our colleagues, we will have a stronger 2020.’
The tough conditions on the high street have claimed several big names in recent months.
Matalan’s third-quarter results came on the day that Beales, a century-old department store, was forced into administration.
Mothercare shut its shops earlier this month.