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Matalan full-year sales rise after year of tech investment

Fashion and homeware retailer Matalan has reported a revenue increase of 3.8% and profit before tax of £30.1 million for its 2018-19 financial year.

In the 52 weeks to 23 February 2019, the business generated revenue of £1.1 billion, as well as a 3.2% increase in full-price sales as it looked to keep reductions and markdowns to a minimum.

A look at the retailer’s accounts shows that gross profit before exceptional items was down by £7.6 million to £128.4 million, with the UK’s decision to leave the European Union and subsequent sterling weaknesses reportedly having a significant impact.

Matalan also said that investment in IT partially offset some of the administrative savings made by the company, which included a reduction in rental fees due to the purchase of the head office on a long-term lease, and the integration of Matalan Direct into the wider business structure.

IT investment is on the rise at many UK retailers, with Matalan directing its tech spend in the financial year on projects such as RFID deployment across the business, an in-house User Experience facility – visited by Essential Retail in 2018 – and “light touch” automation within its Knowsley distribution centre.

Over the course of the year, Matalan also completed the roll-out of a new EPoS system within its store estate, and kick-started some trials using assisted service checkout facilities aimed at speeding up the point of sale process.

Online revenue at the business was up by 31% year on year, and Matalan said that a key priority is to ensure it can encourage its customers to shop across channels, as it has identified this type of consumer as more valuable to the organisation in the long run.

Jason Hargreaves, CEO of Matalan, said: "Our strategy has added more choice to a strong core product offer, while improving the shopping experience via refurbished store space and an enhanced online journey.

“We also continue to invest in infrastructure that helps us operate more efficiently."

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