Matalan holding up well amid spending squeeze

Matalan today warned there was no improvement in sight for the troubled retail sector, but it was “well positioned” amid a squeeze on household budgets.

The budget retailer, which has more than 200 stores, said sales edged up just 1.3% to £253.4 million in the 13 weeks ended May 27. Chief executive Jason Hargreaves, son of billionaire founder John, said the chain’s performance was “strong” in light of the “challenging market”.

Profits were up almost 38% at £22.3 million. UK fashion retailers, including giants like Next and Marks & Spencer, have been struggling in recent months due to the pound’s Brexit-induced slump driving up costs and a shift to spending on leisure and travel curbing demand for clothing.

Hargreaves highlighted a 21.5% jump in full-price sales and praised investments in design for boosting ladieswear sales, with printed items among top-sellers.

Improvements in online, including the introduction of next-day click and collect, also spurred growth.

Hargreaves said the firm does not expect the retail picture to recover in the near term and remained cautious.

He acknowledged consumers are facing tough conditions due to the rising cost of living and economic uncertainty, but argued that “in such a climate Matalan is well positioned to offer fantastic design and quality at outstanding value”.

Matalan plans to refresh more stores in the rest of the year to keep shoppers on side.

John Hargreaves, based in Monaco, hit headlines last year in an £84 million battle with HMRC over tax on a shares sale.