Profitable Matalan plans to expand

Jun 16 2009 by Iain Laing, The Journal

FASHION and household chain Matalan has signalled the start of an expansion after concluding there was scope for new stores in the UK.

The group, which has 203 outlets, will open three more this year and said it was working on an accelerated programme for next year.

Matalan’s pledge came as it announced operating profits of £102m for the year to February 28, up from £89.4m a year earlier.

The business, which was taken private in 2006 by a company controlled by the family of founder John Hargreaves, described market conditions as challenging but said it had outperformed the wider market.

In the first 14 weeks of the new financial year, like-for-like sales improved by 8.2% as shoppers warmed to its store refurbishments.

About £16m was invested in the past financial year, with a similar figure expected this year. About 120 stores currently meet the new standard, with better visual merchandising and store navigation.

Matalan has also driven footfall by introducing new ranges, such as Et Vous and Soon in womenswear, while the menswear offering has been “significantly enhanced“ with the addition of the 24/7 range.

The company launched a transactional website last November and is expanding overseas for the first time through franchise partners in the Middle East.

Chief executive Alistair McGeorge said: “We believe there is significant scope for new Matalan stores in the UK and expect to continue to exploit this opportunity in coming years.”

Mr Hargreaves opened the first Matalan in Preston in 1985, taking inspiration from low-price, out of town retailers in the US.