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Matalan credits 'flexible operating model' for Q1 growth

Matalan CEO Jason Hargreaves said continued sales growth reported by the fashion and homeware retailer in its first quarter was partly due to the company’s stores and online operation working in “a complimentary manner”.

The importance of a well-connected physical and digital operation as highlighted as Matalan said overall sales for the 13-week period ending 26 May were up 4.9% to £265.9 million, compared to the £253.4 million recorded one year before. Online growth was said to be 39%.

The retailer reported EBITDA of £24.8 million, which was up £2.5 million compared to the same period last year.

Hargreaves attributed success to Matalan’s continuing store refurbishment scheme, good stock management, and its agile customer contact strategy and flexible operating model.

“Our stores and online channels work in a complementary manner giving customers the convenience and flexibility they are looking for,” he explained.

“Greater product choice, an improved in-store shopping experience and further enhancements to the website have all been really well received.”

He added the company is cautious in its outlook and that market conditions are expected to remain difficult. “Currency pressures on operating margins are ongoing,” he said.

Matalan’s full-year result for 2017-18 were announced in June, with total revenue for the 52 weeks to 24 February 2018 at £1.06 billion compared to £1.04 billion the previous year.

Full-price sales rose by 11.7%, with less focus on reductions. EBITDA was up from £77 million to £104.5 million, and eCommerce sales grew by 30% following the launch of the retailer’s new website.

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