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Clothing gross margin books 1.6% growth at Matalan

02 Mar '06

3 min read

Clothing and homewares retailer Matalan announced the pre close trading statement for the 26 weeks ended 25th February.

It stated that Matalan is now entering the close period ahead of publication of its financial results for the year to 25th February 2006. Results for the year are expected to be in line with analysts' estimates.

As previously reported, the financial year has been characterised by a difficult trading environment. Total like for like sales reduced by 7.4 percent in the 26 weeks to 25th February with trading since our last update in January being in line with the last 26 weeks.

Home has continued to disappoint, compounded by a poor performance from the Christmas gift ranges. Our move towards improving profitability has led to a reduced level of grey market activity with a consequent reduction in like for like sales. However, market share on clothing was maintained at 3 percent.

We continue to focus on our gross margin which, cumulatively, was up 0.5 percent across the 26 week period. Within this, clothing gross margin (including grey market) was up 1.6 percent, offset by additional markdowns taken to clear through underperforming Home ranges.

We are exiting the financial year with a satisfactory stock position, which has a greater mix of new Spring/Summer product than a year ago and with our cash balances in accordance with our overall plans.

John King, Chief Executive, said: “Matalan is on track to deliver results for the year to 25th February that are in line with market expectations. The past year has been a difficult one, and the retail environment has been tough. The outlook for the sector remains challenging, but Matalan is continuing to maintain its market share in clothing and is taking action to address the issues in its Home operations.”

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