Matalan defies retailing gloom

Clothing retailer Matalan has defied the gloom on the high street after cheering rising revenues in the first quarter of its financial year.

For the 13 weeks to 26 May the firm’s total revenues lifted 5 per cent from £253.4 million to £265.9m. Online sales surged 39 per cent.

Earnings before interest, tax, depreciation and amortisation were up 11 per cent to £24.8m.

Chief executive Jason Hargreaves said: “Our first quarter represents a strong set of results. Good stock management, flexibility in our operating model and agility in our customer contact strategy helped us outperform a volatile market.

“Thanks to the hard work of our colleagues, we continue to deliver consistently for customers and can be pleased with our performance.”

However, Hargreaves said he does not expect the general tough retail backdrop to improve. Many retailers have been hit by the fall in the pound, rising business rates and labour costs.

“Currency pressures on operating margins are ongoing,” the Matalan boss noted.

“We are therefore cautious in our outlook but confident that our strategy is delivering for customers which positions us well.”

Hargreaves took home some £1.5m last year after securing a successful refinancing package for Matalan, which has almost 230 stores across the UK.

Accounts filed at Companies House show that the highestpaid director – likely to be Hargreaves – earned a £900,000 bonus on top of a basic pay of £600,000.

Pre-tax profit for the year to 24 February more than doubled to £20m, while total revenue nudged up 2.5 per cent to £1.06 billion.

It is understood that the reward was tied to the results – the best for seven years – and the refinancing of the retailer’s loan notes, which were maturing in 2019 and 2020.