Matalan to focus on supporting digital proposition as it reports challenging year

Matalan is accelerating changes to its supply chain to enable more agility across channels as it reports a tough past year of largely flat sales and declining profitability, combined with the recent impact of Covid-19. 

Alongside results for the 53 weeks to February 29 – showing revenues of £1,129 million versus £1,104 million and restated EBITDA of £80.3 million compared with £102.4 million last year – the company stated it is pushing ahead with improving efficiency in the supply chain including better stock management.

This will involve utilising its investment in RFID and building on its ability to fulfil online orders from stores as well as distribution centres. This is currently possible at 75 Matalan outlets. This move towards better facilitating its digital channels is already being borne out as the company reported online growth of 24% in its last financial year.

The strategic changes already afoot are being accelerated as a result of the impact of Covid-19. Jason Hargreaves, CEO of Matalan, said: “As we emerge from the Covid-19 lockdown, it is more important than ever to evolve and be agile in responding to changes in consumer behaviour in these unprecedented times. Our business model has proven well positioned to adapt, with a rapidly growing and profitable online channel, and an estate of predominantly large out of town stores where social distancing protocols have been well implemented.”

While he admitted it is still too early in the recovery phase, he said the company was very clear on the key areas it needs to deliver on in the months ahead. “The pace of change required across the market to adapt to the current environment is evident and we are confident that we are well placed, and focused, to deliver against that need to quickly progress our recovery,” he added.

Sofie Willmott, lead retail analyst at GlobalData, said Matalan is well positioned to cope with the aftermath of Covid-19 due to its out-of-town locations being more attractive to concerned shoppers who might want to avoid the busy high street. 

“Additionally, as many UK shoppers trade down amidst worries about personal finances and job security, its value focussed product range will be attractive,” she added.