It’s been a very busy “transformational” year on several fronts for Matalan as the fashion/lifestyle retailer battles to delivery a wide-ranging turnaround plan.
First there’s the drive to improve underlying profitability set against a “challenging economic backdrop”, and then there’s the wider plan to deliver “better style, quality and value product offering” while increasing its investment in stores, online and supply chain” via an additional £25 million from core investors. Phew!
So how’s all that been going? According to executive chair Karl-Heinz Holland, very well, although some figures in its result statement were negative.
“With a clear focus on maintaining profitability, we have delivered EBITDA growth. Our store investment plan is delivering results even better than we expected, and we’re making good headway on our plan to open 10 new stores and upgrade 30 existing locations in FY26.”
Against that backdrop, total revenues for the 52 weeks ended 22 February fell 9% to £985 million although it saw continuing improvements through the year “driving a stronger second half, particularly online”.
EBITDA rose 6% year-on-year to £56 million thanks to gross margin growth (up 3% to £510 million) and cost controls. But the pre-tax loss grew 12% to £67 million due to exceptional non-cash impacting items.
It also saw “significant improvement” in profitability in H2, with EBITDA up £11 million, including a £10 million improvement delivered in Q4, to £16 million.
Meanwhile, that drive for better style, quality and value in both menswear and childrenswear was “reflected in market share gains in the second half of the year”.
But it admitted more work needs to be done to improve womenswear and homeware “to ensure Matalan provides great product across all categories”.
There will also be a drive to source popular, natural and quality heavyweight fabrics “while launching fewer but more considered and stylish ranges”.
On its store front, Matalan undertook 12 refits “with results ahead of expectations” and plans are in place to open 10 new and relocated stores and upgrade 30 existing locations in FY26, while also investing in digital capability with the launch of a new app.
And the outlook? Holland added: “While we started the new financial year with positive momentum, we continue to operate in an increasingly competitive market and uncertain macroeconomic conditions. Against this backdrop, we remain mindful of the tough operating environment and know there is much more to do to complete our transformation.
“At the same time, we are confident in the strength of the Matalan brand and the opportunities ahead, and believe the business is well positioned to continue to transform and grow its profitability.”
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