Matalan: Rainy weather and shift back to stores leads to revenue slump
Matalan reported a challenging first quarter as poor summer weather impacted sales against the backdrop of cost of living pressures and a shift away from digital.
The bargain homeware and clothing retailer said revenues in the thirteen weeks to 27th of May declined eight per cent to £263m.
However, in the five weeks to the end of June, the figure rose from £122m up from £116m compared to the same period last year.
EBITDA was also hindered in the weeks leading up the May down to £26m, however it recovered slightly since with June figures reaching £33.6m up from £18.8m on last year’s results.
Matalan said it expects an EBITDA guidance range of £60m-£65m for the full year, up from £30.6m last year.
Matalan reported a number of challenges during the quarter, including a decline in online sales after it shifted to an ecommerce platform run by online retailer THG.
Customers also showed signs of favouring physical stores over ordering online.
“From an online perspective there has been a market trend that has shifted demand back towards stores,” Jo Whitfield, chief executive of Matalan, said.
“However, in addition we have seen our own online sales step back to an even greater extent. The business migrated to the THG Ingenuity platform at the end of March with some limited cutover disruption into early April.”
“We continue to closely manage our working capital and liquidity. In June we issued £25m of super senior notes to complete the £100m of new capital that was committed back in January,” Whitfield said.
“This injection will support the business through transition and enable us to establish stronger performance across the remainder of the year and beyond.”
“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.”