Matalan enjoys a boost in turnover but warns of a tougher year ahead

Kasmira Jefford
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MATALAN has warned of tough trading to come as consumers continue to feel the pinch, despite the firm posting a rise in like-for-like sales and delivering its best sales week since 2005.

The out-of-town fashion and homeware retailer said like-for-like sales increased by 9.9 per cent in the five weeks to 31 December, up from 1.3 per cent in the 13 weeks to 26 November, thanks in part to the success of its Christmas TV campaign.

The retailer added that it had achieved its best sales week to date during the period, breaking a previous record set in 2005, thanks to “a targeted promotional strategy” with offers on selected lines.

Chief executive Darren Blackhurst said: “It is clear that Matalan is well positioned in this increasingly competitive market to offer customers the higher quality, lower cost value proposition they seek.”

Matalan added that higher cotton prices at the end of 2010 and early 2011 were now putting pressure on margins, and due to its buying cycle the recent fall in cotton prices will not be reflected in its margins until the second half of next year.

“We remain focused and cautious and recognise the need to maintain healthy cash levels and tight control of costs as we look after customers and exceed their expectations going forward,” Blackhurst added.

The 190-store chain posted total third quarter revenues of £310.8m with like-for-like sales up 1.3 per cent, it said.