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Matalan is a clothing and
homeware store in the United Kingdom. It was founded by John Hargreaves in 1985.
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Matalan to cut costs by letting go staff
Matalan , the discounting retailer, in a move to cut costs, is expecting to lay of temporary Christmas personnel and slashing employee's working hours. The changes are expected to affect at least 1,000 employees in 40 stores in the North, though the company is reviewing staff levels at all 198 stores, according to the Daily Mail. A source told the Mail: 'They took on too many temps. They are cutting hours to get back on budget. If a store is not performing, it will recruit fewer staff.' Hargreaves, the company responsible for Matalan's imminent takeover, is thought to be initiating the cost-saving changes.
Shopworkers are outraged. 'Next week is when trading peaks,' said one whose hours have been cut dramatically. 'They are shooting themselves in the foot.' Hargreaves declined to comment. Matalan's headstrong founder, who owns 53% of the business, revealed in July that he was preparing a bid to take it private.
www.matalan.co.uk
27 November 2006
Matalan optimistic despite sales drop
British discount retailer Matalan posted a 6.5 percent drop in first half profits on Tuesday. The company, which is being taken over by founder and majority shareholder John Hargreaves in a deal valued at €817 million, said same-store sales fell 1 percent. However company morale was boosted by a slight recovery in total core like-for-like apparel sales, which rose 0.5 percent. Operating cash flows improved from £66.1 million to £77.5 million this year.
“The results are much as expected,” said Richard Ratner, analyst at Seymour Pierce. Net debt improved from £36.3 million last year to £10.5 million. The company added that it had “tightened” its stock commitments for the second half. This will help drive cost efficiency. It also said it had negotiated payment terms and conditions with overseas suppliers and expects this to lead to an £25 million increase of working capital cash flow by the end of the financial year.
“Trading conditions remain challenging, however our agenda of focusing on improving profitability and cash flow is now beginning to bear fruit,” said chief executive John King.
www.matalan.co.uk
31 October 2006
Matalan finally sees sales rise
British discount fashion retailer Matalan has reported a sales rise for the first time in two years. Total sales gained 2.2 percent in the eight weeks ended 26 August. Like for like sales grew 1.3 percent, up from a slide of 3.1 percent during the same period last year. New space increased 3.2 percent. Gross margins gained 0.2 percent, lifting margins for the year to date to 0.8 percent. The company said payment term improvements were expected to benefit working capital cash flow by at least £25 million by the end of the financial year. Action has also been taken to tighten stockholding levels by £20 million, which will optimise working capital requirements by year's end. Eighteen stores have been refurbished in the year to date, with initial sales up 9.3 percent. A further 12 refurbishments are in the pipeline for the remainder of the fiscal year. To combat the pressures of fixed costs such as rent and utilities, Matalan has lowered its inventory levels, thereby reducing markdown and handling costs. Chief executive John King said, “I am encouraged that, given tough trading conditions, we continue to grow our core clothing business whilst maintaining our focus on driving improved cash flow and business efficiencies.”
www.matalan.co.uk
6 September 2006
Matalan in dispute over suppliers
The Forum of Private Business, which represents 25,000 small businesses, is considering taking legal action against Matalan in a dispute over the discount retailer's changing payment terms to its suppliers.Last November Matalan demanded a mandatory 2 per cent discount from suppliers to help compensate for tricky trading conditions. A scheduled meeting between the FPB and John King, Matalan's chief executive, to discuss the issue failed to take place earlier this month and now Nick Goulding, the FPB's chief executive, says the group is considering taking legal action to reverse Matalan's decision.
He claims that in unilaterally changing its supplier terms, Matalan has contravened the Late Payment of Commercial Debts (Interest) Act 1998. Goulding plans to bring up the issue of retailers' payment practices when he meets Margaret Hodge, the minister responsible for small firms, at the Department of Trade & Industry tomorrow. "If there is sufficient stomach for it, then there are legal avenues we will go down," said Goulding, who added that retailers have a habit of changing supplier terms when it suits them.
16 July 2006
Matalan worth more than its bid
Matalan is worth at least a third more than John Hargreaves, its founder and majority shareholder, is seeking to pay for it, according to the largest non-family shareholder. David Herro, fund manager at Harris Associates, which owns 6.9 per cent of Matalan, believes that the chain is worth 300p a share, well above the 170p to 200p Hargreaves is planning to bid for it.
Herro has urged Hargreaves to exercise "sound moral judgment" and not try to buy the company on the cheap. "We think that Matalan is worth 300p if run properly," Herro said.
However, he added that Hargreaves, whose family owns 53 per cent of the chain, is unlikely to pay this much.
"Given that the chairman owns 53 per cent, the non-executives have limited bargaining. We might not get £3 but we need to get somewhere in the twos," he said, adding that a bid of between 170p and 180p a share is "not acceptable".
A banker close to Hargreaves described a 300p-per-share offer as unrealistic. He said that a bid of between 180p and 190p would represent a multiple of earnings before interest, taxation, depreciation and amortisation of up to 8.8, which is higher than comparable recent deals. Matalan's shares closed on Friday at 173p.
8 July 2006
Hargreaves faces ultimatum over Matalan
Matalan chairman John Hargreaves was given an ultimatum by his board of directors on Wednesday. In reaction to his plans to take the discount retail chain private, the board told him he had four weeks to either make a proper offer for the company or step down. Hargreaves, whose family controls 53 percent of the company, was also asked by the Matalan’s biggest institutional shareholder, Harris Associates, to “step down and make a proper bid.” David Herro, a fund manager at Harris Associates, told the FT: “He should step off the board and then, if the deal does not get consummated, he could come back as a non-executive but not as chairman.” He said that Hargreaves had already verbally committed to standing down and should do so now. “The company cannot live up to its potential with this constant instability in top management.” If the four-week deadline is not met, there is a possibility that the board could resign, reports the FT.
www.matalan.co.uk
6 July 2006
Hargreaves bid for Matalan
John Hargreaves, chairman and majority shareholder of Matalan, is expected to make a bid for the discount retailer he founded this week. Hargreaves and his family control 53 percent of the company, which he founded some twenty years ago. He and the board of directors are momentarily embroiled in a battle over the future of the retailer. Against his wishes, the board issued a statement on Friday stating that Hargreaves was working on a possible offer. “The non-executive directors have stuck together to make this stand,” a source close to the company told the FT. “They know this might lead to all of them being sacked.” The statement was in reaction to Hargreaves intended cutting of dividends. The board members felt it was their duty to minority shareholders to disclose the information, however, according to the FT, this was seen as a move to reduce the value of the shares and help achieve a lower bid. The board will not accept a bid lower than £820 million or 200p per share, a premium on the company’s market capitalization of £691 million. “He is going to have a fight on his hands if he bids too low,” a source close to the board told the FT.
Matalan saw earnings drop from £80.5 million to less than £55 million last year. The retailer suffered increased competition from other discount clothiers like Primark. Furthermore, the internal turmoil – which sees the company searching for its fourth chief executive in five years – has left the firm weakened. Hargreaves has said repeatedly that the public company is undervalued by the market. It lost two-thirds of its value since its peak in 2001. Meanwhile, Matalan’s bankers Barclays have been asked to and have agreed to arrange the buy-out.
www.matalan.co.uk
3 July 2006
Matalan in talks with sportswear billionaire
Mike Ashley, the secretive sportswear billionaire, has held talks with Matalan about a joint venture that may lead to him taking a large stake in the business. Ashley has drawn up plans for Sports World units to be opened above Matalan stores, in specially constructed mezzanine floors. As part of the plan it is thought 41-year-old Ashley would take a stake of up to 25 per cent in the troubled discount retailer.
The entrepreneur is also believed to be demanding a generous options package. Talks between Ashley and John Hargreaves, the founder and majority shareholder in Matalan, began last summer and have continued into this year. However, they are understood to have stalled in recent months. Bankers said the talks could be revived, although Ashley would have to win over Hargreaves, who owns a 53 per cent stake in the retailer.
At its peak in 2000, Matalan was worth more than £3 billion, but the share price has fallen sharply over the past five years. The shares closed last week at 170p, putting a value of less than £700m on the retailer. A spokeswoman for Matalan confirmed that discussions had taken place, but refused to comment on the details of the talks.
Matalan rounds off tough year
Discount retailer Matalan has reported a 30 drop in pre-tax profits last year. Total sales fell 3.9 percent to £1.07 billion and like-for-like sales dipped 6.9 percent as a result of lagging home ware sales.
Pre-tax profit dropped to £56.7 million from £80.5 million, the impact of a one-off £20.4 million charge to update software, which was never completed. This may result in legal action against Matalan’s advisers, Kurt Salmon Associates.
“This was a difficult year for Matalan in a tough retail environment,” said chief executive John King, who will stay on until year’s end. “Much work has been done to improve our retail position, and progress has been made particularly in our core clothing business.”
The company said that clothing had seen market growth during the past year, with prices at a discount to its competitors. Clothing sales rose 0.1 percent, while overall sales fell 2.2 percent, compared with 8.8 percent last year. Matalan warned that it saw no signs of improvement, although like-for-like sales rose in March and April, relative to a weak 2005.
The retailer has refocused its attention on its clothing brand, investing in a marketing campaign starring model and TV presenter Melanie Sykes. However, some analysts are not impressed. Richard Ratner, analyst at Seymour Price told The FT: “we believe that Matalan will struggle to stand still this year, with out of town customers going to Tesco or Asda, and huge competition from the in-town value players, Primark and Peacock.”
Meanwhile, home wares are causing full-year results to flag, as consumers became reticent about spending and the company had difficulty updating in-store ranges. Matalan has said that it will sell all its current stock before introducing new ranges later this year. It has also appointed a new home ware team.
www.matalan.co.uk
5 May 2006
Doom and gloom expected for Matalan
Matalan is expected to release a grim update this week, reporting slow retail trading and the as yet unfilled position left by chief executive John King. Analysts expect the discount retailer to reveal a profits drop to around £55 million from £80.9 million in the past year ended 25 February. In March the group said like-for-like sales dropped 7.4 percent in the second half of the year ended 25 February. With the recent spate of bad weather, analysts are concerned that sales have been further affected.
There has been speculation that founding chairman John Hargreaves, who owns 53 percent of the company, is prepared to sell the business for a good price and that private equity groups have shown interest. Other shareholders include Harris Associates, a Chicago-based investment group, with more than 7 percent and Fidelity. Other British businesses expected to release updates this week include JD Sports, who are expected to announce a rise in profits.
www.matalan.co.uk
2 May 2006
Matalan values at £903m in bid prospect
Matalan founder John Hargreaves has had talks with three venture capital groups about a 220p a share buyout valuing the discount clothing chain at £903 million. Hargreaves, who controls 53 per cent, is believed to have insisted any bid should be above 300p. However his expectations will have been lowered as trading at Matalan has steadily worsened. Shares closed at 190p on Friday.
Last week Angus Monroe was linked with a possible bid for Matalan after he was ousted from his position at Instore. Asda has also been touted as a possible bidder.
6 March 2006Matalan optimistic in tough times
Apparel and home wares retailer Matalan reported a 7.4 percent like-for-like sales drop in the 26 weeks ended 25 February. Home wares continued to perform poorly due to its week range of Christmas gifts, but apparel maintained its market share at 3 percent.
The company said it would continue to focus on its gross margin, which was up 0.5 percent, cumulatively, during the period. Its apparel gross margin rose 1.6 percent.
“Matalan is on track to deliver results for the year to 25 th February that are in line with market expectations,” said chief executive John King. “The past year has been a difficult one, and the retail environment has been tough. The outlook for the sector remains challenging, but Matalan is continuing to maintain its market share in clothing and is taking action to address the issues in its Home operations.”
www.matalan.co.uk
2 March 2006
Buyout rumours surround Matalan
Discount retailer Matalan has been the subject of management buyout rumours recently, following concerns over plunging sales, reports just-style.
A spokesperson for the company refused to disclose whether discussions were taking place and said: “Matalan never comments on any buyout speculation.”
The company's chief executive John King recently announced his departure from the business. He plans to return to the US at the end of this year.
www.matalan.co.uk
9 February 2006
Matalan shareholders express concern
John Hargreaves, chairman and majority owner of Matalan, is to meet shareholders amid growing concern about his dominance of the company.
Disquiet about a management vacuum at Matalan has increased since the announcement last week that John King, chief executive, is to leave at the end of the year. Merrill Lynch, the company's broker, has contacted leading shareholders and offered them a meeting with Hargreaves and Geoff Brady, the deputy chairman of Matalan and senior non-executive.Hargreaves and Brady are keen to explain to shareholders the circumstances surrounding King's departure. He will receive a £420,000 payoff when he leaves, a payment the non-executives argue is needed to ensure that King stays for the full year to allow a smooth handover.
22 January 2006
Matalan loses its chief executive
British discount retailer Matalan has announced the departure of its chief executive John King at the end of the year. King will return to the US, leaving the retailer to find his replacement. He is the third chief executive in five years to leave the company.
King joined the firm in 2002 as head of jeans company Lee Cooper. Prior to that he worked for the lingerie and leisure wear manufacturer and wholesaler Delta US. In 2003 he replaced Paul Mason as chief executive of Asda. Mason left after a rift with chairman John Hargreave, with the latter denying that he did not get along with his chief executives. However, this recent departure has the industry questioning Hargreave's role.
The retailer, which suffered from poor Christmas trading and has predicted full-year results on the low end, said that King had “agreed to continue in his role until the end of December and will continue to manage the business while a new chief executive is sought.” Executive search firm Spencer Stuart has been selected to find his successor.
www.matalan.co.uk
19 January 2006
Matalan Christmas sales down
British retailer Matalan has reported a decrease of 5.5 percent in like-for-like sales during the Christmas period. The company said homewares had performed poorly and that the Christmas gift ranges had been “particularly disappointing”. However, clothing sales had improved compared to earlier in the season, with shoppers purchasing coats and knitwear.
The retailer said it had continued to concentrate on gross margin, which had risen 0.3 percent over the 19 week period ended 8 January. Clothing gross margin rose 1.3 percent. Overall sales dropped 2.1 percent over the 10 weeks to 7 January. “In a tough trading environment we have maintained market share in our core clothing business, which represents 80 percent of sales,” said chief executive John King. “Home and Christmas gifts performed poorly and actions are underway to address this.”
www.matalan.com
11 January 2006
Matalan mandatory squeeze on suppliers
British retail group Matalan has enforced a mandatory 2 percent cut in payment to suppliers for goods that it had ordered for the second half of the year, according to the Financial Times. The company is struggling to protect its profits in a challenging market.
In November the company reported a drop in underlying sales of 10.6 percent since the beginning of the second half and said that there was “little evidence to suggest that this will improve in the near term.”
The squeeze on suppliers has caused “an outrage”, an anonymous source told the FT. “When an order or contract is placed, that is the time to negotiate, not afterwards.”
According to Richard Hyman, managing director of Verdict Research, Matalan's decision is “not unique” to the industry, but warned that it is something to be done “with care”. “If you are an own-label retailer, your relationship with suppliers is your lifeblood. And for suppliers living in a world where you get a margin of x for goods and suddenly you get a margin of x minus 2 percent, something has to give, and that can be the quality of the product.”
www.matalan.co.uk
21 November 2005
Matalan refutes profit warning
On Tuesday British retailer Matalan denied that it had issued a profit warning, despite reporting a 10.6 drop in underlying sales since the beginning of the second half. The company also admitted that there was “little evidence to suggest that this will improve in the near term.”
Finance director Phil Dutton said the drop in sales did not equal a profit warning, but said “the next eight weeks will determine everything and it's very difficult to predict and so we're giving no guidance.”
Chief executive John King admitted that the company had bought 40 percent less seasonal stock for Christmas than last year in an effort to remain conservative, but told the Financial Times that he was nervous, like he was every year.
The company attributed the recent disappointing results to slower sales of coats and sweaters due to the warm autumn weather, as well as its planned departure from the “grey” clothing market, a slow start to the Christmas season shopping and a continued poor performance of its home business.
Pre-tax profits were down 28 percent to £30.7 million for the first half, while sales dropped 2 percent to £527.8 million. On the up side, gross margin was up 1.4 percent.
www.matalan.co.uk
2 November 2005
Matalan face tough sales
Matalan is expected to report dire trading in recent months at it's interim results this week with analysts forecasting a drop of more than 10 per cent in like for like sales. Clothing retailers have been hit by the recent warm weather with sales of knitwear and winter coats falling by as much as 30 per cent. The recent poor trading has led to suggestions that retailers will launch pr e-Christmas offers and sales earlier.
31 October 2005
Matalan feels spending pinch
Consumer slowdown has moved into the value retail sector and for Matalan in the period to 27th August, total sales reduced by 1.8 per cent and like for like sales reduced by 6.4 per cent. However, the value retailer continued to improve margins during the same period, which increased by 1.2 per cent, reflecting a more profitable sales mix and an improved currency position.
John King, Chief Executive, said: The measures undertaken earlier this year have enabled us to keep the business in good shape during a difficult six months in UK retail and we are pleased to have delivered an improvement in gross margins across the half. The business is more streamlined as a result of tighter cost control and improved cash flows, and our stock position has been carefully managed. Our focus is now on a successful launch of the new season ranges.'
1 st September 2005
Matalan sees H1 results slide
Discount retailer Matalan has posted disappointing first-half results due to difficult market conditions in the UK. Net sales for the period ended 26 August fell 1.8 percent while same-store sales dropped 6.4 percent. The slide did slow down to 3.4 percent during the last eight weeks of the period. The gross margin improved by approximately 1.2 percent.
“It has been well documented that the retail sector has suffered from difficult trading conditions,” said Matalan. Earlier this month the company announced that it would cut about 300 jobs in order to cut costs.
www.matalan.co.uk
31 August 2005
Matalan cuts jobs
Matalan has axed around 300 jobs from its head office and stores as part of a restructuring programme. 100 jobs are to go from its head office while one job role is to go from each of the groups 190 stores. The company will initially look for voluntary redundancy and relocation.
The company said: "This move is regrettable but prudent given the challenging retail environment." In its last trading update, Matalan said like-for-like sales were 6.5 per cent lower in the nine weeks to July 2. The job losses are the latest blow to the retail sector, as some of the worst trading conditions in two decades cause firms to shed staff.
www.matalan.co.uk
22 August 2005
Matalan appoints new director
British discount retailer Matalan has appointed Martin Reavley as a non-executive director. Reavley is a former finance director of Kesa Electricals and has been first bursar of King's College in Cambridge since January 2005.
www.matalan.co.uk
12 July 2005
Matalan to cut jobs at all levels
High street retailers Matalan said yesterday jobs would go across the board as it looks to control spending. The struggling group has begun talks with staff that could see hundreds of jobs axed among its 17,000-strong workforce. The company said: "No final decision has been taken at this stage." News of the talks comes just a week after consultant Verdict Research warned that 150,000 jobs could be lost on the high street by 2010.
Stores are suffering as shoppers worried about the slowing housing market cut back. Matalan is expected to make only the same profits this year as last. Sales were down 8.8 per cent in March and April. John Gorle, national officer at shopworkers union USDAW, said the slowdown on the high street was the worst for 20 years. But he added: "We believe the vast majority of retailers will rise through this. It's not an insurmountable problem."
www.matalan.co.uk
15 June 2005
Matalan cuts jobs
Matalan is to axe hundreds of jobs from its stores and head office as it slims down its operations in the face of a continuing downturn in consumer spending. The job cuts were announced internally late last week. A consultation process with staff is due to begin later this week. The cuts will be "in the hundreds", according to an executive close to the company.
www.matalan.co.uk
13 June 2005
Matalan sells jeans brand for £30.5m
Value retailer Matalan is selling its jeans brand for £30.5m. A consortium
made up of Sun Capital, The 180 Group, and Emerisque Capital has paid £30.5m
to acquire the Lee Cooper jeanswear business from Matalan. The brand has been
on the market since last year after discount retailer Matalan decided to exit
manufacturing to focus on its core retail operation.
Sun Capital and the 180 Group are both private equity firms, while Emerisque
is an investment vehicle specialising in acquiring underperforming mid market
businesses in Europe.
Ajay Khaitan, current Chief Executive of Emerisque, will become CEO of Lee Cooper and has recruited a number of apparel professionals to join the existing Lee Cooper team.
Khaitan said: "Lee Cooper is a global brand that has incredible authenticity and expertise in Denim. It is a leading denim brand in each of its markets. It also has a loyal consumer following, built up over many years by consistently delivering excellent quality products. The brand has been a strong and prevalent force in the marketplace for over 97 years, and my team looks forward to further evolving what Lee Cooper means to its current and new customers. We have significant plans for the company, and we are eager to begin our path into the future."
The Lee Cooper brand is based in France, and is distributed in more than 40 countries. It dates back to 1908, and was acquired by Matalan in 2001.
www.matalan.co.uk
4 May 2005
Matalan sales drop
Matalan, one of the UK's leading discount stores, has posted disappointing sales results. The company suffered a like-for-like sales decline of 8.8 per cent in March and April of this year, falling below expectations.
The company said that the number of consumers visiting its stores had dwindled by 7 per cent for the first time in nine weeks, revealing a weak retail climate. John King, Group Chief Executive, stated: "In a tougher marketplace, our focus over the next twelve months is to manage greater efficiencies into the business, delivering improved margins and stronger cash flows."
Group Chairman, John Hargreaves, said: "Our move towards improving profitability has led to a focus on improving our sales mix through a scaled down mid-season sale and a reduced grey market offer. Costs will continue to be controlled tightly to mitigate fixed cost increases from areas such as rents, rates, minimum wage and fuel prices. As part of a tighter control of stocks, the business began the financial year with 11 weeks of stock cover, a reduction of 2 weeks on a year earlier. Particular emphasis has been placed on reducing non-seasonal stock levels and the clearance of old season stocks."
This morning the company's share price was down 3.75 points to 189,25 pence.
www.matalan.co.uk
4 May 2005
Matalan Sees Growth
Matalan has reported like-for-like growth of 4.5 per cent across the year to February 28, ending a year in which the business met its goal of a return to 'sustainable' growth. Across the year, the business saw total growth of 12.6 per cent, with sales volumes up 8.1 per cent. As deflation continues to have an impact across the clothing sector, average selling price decreased by 3.6 per cent.
The figures show strong growth over the year February 2004, when Matalan saw total growth of just 2.3 per cent, with a like-for-like decline of 6.5 per cent. The group said sales across the year had shown "encouraging progress", helped by an earlier launch of the spring/summer season, estimated to have boosted like-for-likes by 0.5 per cent. Residual stocks have also been much more closely managed, allowing them to be cleared "without the need for distress markdowns".
Gross margin across the second half will be up by around 3.5 per cent year-on-year thanks to significantly lower markdowns, and up around 1.5 per cent across the year. Matalan said its expectations for the year are unchanged, with results likely to be in line with City forecasts of around £84m. The group is continuing the due diligence process on the planned sale of its Lee Cooper brand.
Chief executive John King said: "This year has been about returning the business to sustainable like-for-like growth, and we have delivered on that objective. Matalan is now on track to deliver profits for the year to February that are in line with analysts' expectations."
www.matalan.co.uk
2 March 2005
Good Christmas For Matalan
Matalan has enjoyed strong Christmas trading, reporting like-for-like growth of 5.3 per cent across the 10 weeks to January 8 despite continued price deflation in the UK clothing sector. Total sales grew by 11.4 per cent despite a 4.4 per cent deline in average selling prices. Across the 19 weeks to January 8, total sales grew by 11.8 per cent, with like-for-like growth of 5 per cent.
Matalan said that an encouraging start to its autumn/winter season continued into the festive period, all product areas making progress, boosted by better availability and strong customer response to the retailer monthly mailer. Matalan said its profit expectations for the year are unchanged. John King, chief executive, said: "We set out this year to return Matalan to like-for-like sales growth and to build a platform for the business to grow in the future. These figures show the business is responding to those efforts.
"Customers like our improved value proposition, and better execution of retailing disciplines has helped us deliver an improved Christmas performance despite the more difficult market conditions."
www.matalan.co.uk
11 January 2005
Matalan To Post Profits This Week
Matalan, the UK discount clothing retailer, is expected to post flat first-half profits this week as speculation continues about a bid from US retail mammoth Wal-Mart. Analysts are forecasting interim profits of between £41m and £44m, compared with profits of £41,2m in the last interim period.
www.matalan.co.uk
1 November 2004
Matalan Approached To Sell Lee Cooper Brand
Matalan is in talks with a potential buyer for its casual clothing brand Lee Cooper. The value retailer, itself at the centre of takeover speculation, said it has received an approach that may lead to the sale of Lee Cooper. Matalan did not name the potential buyer, saying negotiations are at an early stage, with the other party "given a period of exclusivity to explore the opportunity".
The retailer said it will make a further announcement when a formal agreement is reached or discussions are discontinued. Last month, Matalan said it expected the jeans and casual clothing brand to make a first half loss of around £0.8m. Matalan sells the range in its own stores as well as wholesaling it across Europe, and said that Lee Cooper had continued to experience difficult trading, mainly in the French market.
www.matalan.co.uk
12 October 2004
Matalan takeover bid rumours
It is rumoured that US retailer Wal-mart and the British Tesco Group are bidding for takeover of the UK clothing discounter. Wal-mart senior executives reportedly flew to London last week and are said to have offered 300 pence per share. It is believed that Wal-mart may want to add the Matalan range to its current collections at Asda.
www.matalan.co.uk
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12 October 2004
New Look Exec To Lead Matalan Bid
Stephen Sunnucks, Former chief executive of high street fashion chain New Look, is to be leading a private equity bid for discount retailer Matalan, according to the Sunday Express.
Sunnucks has held talks with most of the leading venture capitalists, including Kohlberg Kravis Roberts and Cinven which are believed to be planning separate bids for Matalan, it said.
www.matalan.co.uk
19 August 2004
Matalan Sees Boosts From Promotions
Discount retailer Matalan has seen a boost to its sales by promotions and store refits. The benefits of investment in price cuts and promotions have reversed its sales decline and launching a programme of store refurbishments has seen a positive response from consumers.
The value clothing and homeware retailer, which saw a 6.5 per cent decline in like-for-like sales across the year to February 28, said like-for-likes have grown by 4.1 per cent across the 18 weeks to July 3. Total volume growth across the 18 weeks was 12.4 per cent, but average selling price declined by 8.3 per cent, reflecting deflation across much of the UK retail clothing second as well as Matalan's investment in price cuts and promotions to clear surplus stock. Turnover grew by 13.7 per cent.
Chief executive John King said: "We are starting to see the results of delivering better value to our customers through lower prices, better promotions, improved quality and greater choice. We still have much to do and our focus over the next two months is on successfully closing out the Spring/Summer season and on launching our new Autumn/Winter ranges."
The company said ladieswear, childrenswear and homeware "have all progressed well and we have started to take action to address the disappointing performance of menswear".
www.matalan.co.uk
9 July 2004
Competition For Matalan Sees Profits Fall
Matalan, the UK clothing discounter, has reported a fall in profits for the year to end February. Like-for-likes are up by 3.1 per cent over the nine weeks to May 1, compared to 6.5 per cent decline across the year to February 28. Turnover for the year was £1,048.3m, with pre-tax profits almost halved to £60.7m, compared to £117.4m a year ago.
Matalan has seen increasing competition for sales, with both Tesco and Asda
growing clothing market share, as well as strong offers from rival discounters
such as Peacocks and Primark. Across the year, retail sales increased by 2.8
per cent, with the group opening 15 stores across the year to bring its total
to 178.
Matalan said summer sales were affected by 'poor choice, weak marketing and
a ladieswear range that failed to meet the needs of our core customer'.
In the second half, sales of higher priced lines including winter coats, jackets and knitwear were disappointing. Sales in November were affected by significant discounting as many UK retailers moved to clear sluggish winter lines.
Matalan founder and group chairman John Hargreaves said: "Last year was a difficult one for Matalan, and the results produced by the group are deeply disappointing, however I believe that the building blocks for a recovery are in place." Along with changes to its buying teams and improved products ranges, Matalan has boosted the timing and content of its regular direct mail communication with its 10m active customers.
Since the start of the new financial year Matalan has seen total sales growth of 13.2 per cent, despite difficult trading over Easter. The retailer said it is pleased with the progress made in ladieswear, kidswear and home, but menswear, where its own Lee Cooper brand is a key offer, remains disappointing. A new menswear buying team in now in place, complementing a new womenswear team recruited last year.
Trials are underway at three stores to establish a new format for refurbishing
older stores in the chain. Like-for-like sales in these trial stores have outperformed
the company average by at least 5 per cent.
Group chief executive John King said: "Our objective has been to establish
the right platform from which we can grow the business in a sustainable way.
We still have much to do, but we are in better shape now than a year ago, and
the actions we are taking are starting to bring improvements."
www.matalan.co.uk
5 May 2004
Former Matalan Chief Takes Levi's Role
Paul Mason, former chief executive of Matalan, has been appointed Levi Strauss & Co president. Mason joins on February 23 and will be based at the company's headquarters in Brussels.
www.matalan.co.uk
4 February 2004
Matalan Sales Suffer In Mild Winter
A mild start to the winter as hit sales of higher priced winter lines at the UK discount clothing retailer. Matalan said trading has deteriorated since its interim results announcement on October 7. In the 14 weeks to December 6, Matalan's total retail sales grew by 2.4 per cent, with like-for-like sales down by 7 per cent.
The reduction in like- for-like sales is due to 1.2 per cent fewer transactions
as well a 5.8 per cent fall in Matalan's average basket value. Gross margins
for the past 14 weeks are up 0.2 per cent.
The company said it has been hit by lower average selling prices, with consumers
buying fewer higher priced items such as winter coats and leather jackets.
The British Retail Consortium said earlier this week that mild weather in the UK during November had affected sales of winter clothing generally. Matalan said it also believed the sales trend "is being felt across the wider market." Better sales of lower priced items, including improved Christmas gift and accessories ranges, have not been enough to offset the fall in sales of higher priced items.
Matalan said full year results will depend upon the rest of the Christmas trading period, as well as the critical end of season sale starting on December 26, but warned: "At this stage however, the board considers it unlikely that the shortfall in sales to date will be recovered in the remainder of the financial year.
www.matalan.co.uk
12 December 2003
Designer Associations At Matalan
Value retailer Matalan is looking to forge a tie-up with a designer for its premium women's tailoring range Et Vous. The retailer is hoping to bring in a designer that it would market in association with the brand for autumn 04.
www.matalan.co.uk
2 December 2003
Matalan and Tesco Merger Rumour Played Down
Reports that discount retailer Matalan and supermarket giant Tesco have held merger discussions have been firmly played down by both companies. Matalan shares rose sharply on Monday, up 3.2 percent to 211p, following a report in the Mail on Sunday which said the two retailers had been held talks until early this year, which could now be resurrected.
Neither company commented directly on the report, but news agency Reuters quoted 'sources familiar' with Matalan which said "John Hargreaves and Terry Leahy have never met." Hargreaves, founder of Matalan, was said by the report to want to retain control of the business, while other members of the family are reported to be keener to explore a sale.
Matalan was also recently linked to interest from Asda owner Wal-Mart, which is trialing stand alone clothing stores using the George brand.
23 September 2003
www.matalan.co.uk
Matalan trials smaller store format
Matalan is to trial a smaller store format which would enable it to bring its discount clothing offer to the UK high street. A trial shop will open in Portadown, Northern Ireland in October. It will stock only clothing, spotlighting Matalan brands such as Easy and Lee Cooper.
Matalan's out-of-town and edge-of-town stores have extended their range to include homeware in recent years. Until now, Matalan has avoided high streets and shopping centres due to the higher rents, but faces increased competition in the discount clothing sector. Asda will open two trial in-town standalone clothing stores spotlighting its George brand next month.
The Matalan store in Portadown's Magowan West shopping centre will be twinned with a larger store in nearby Craigavon three miles away, enabling Matalan to economically deliver clothing to both.
12 September 2003
www.matalan.co.uk
Matalan to trial smaller stores
Discount
clothing retailer Matalan is to trial a smaller store format which would enable
it to bring its merchandise to the UK high street.
A trial shop will open in Portadown, Northern Ireland in October. It will stock only clothing, spotlighting Matalan brands such as Easy and Lee Cooper. Matalan's out-of-town and edge-of-town stores have extended their range to include homeware in recent years.
Until now, Matalan has avoided high streets and shopping centres due to the higher rents, but faces increased competition in the discount clothing sector. Asda will open two trial in-town standalone clothing stores spotlighting its George brand next month.
The Matalan store in Portadown's Magowan West shopping centre will be twinned with a larger store in nearby Craigavon three miles away, enabling Matalan to economically deliver clothing to both.
August 27 2003
www.matalan.co.uk
Lack of Focus at Matalan
Trading
figures for Matalan revealed that like-for-like sales for the 13 weeks to May
31 were down 7.5 per cent, compared to a 3.7 rise for the same period last year.
Sales were up 6.2 per cent to GBP 241.3 million and gross margin rose by 80
basis points.
John King, the retailer's chief executive, admitted to Lorna Hall that Matalan had not given its customers enough incentive to visit its stores this season. As an out-of-town retailer, customers need to feel it is worth their while travelling to see the product offered.
The lack of focus on the womenswear range has proven difficult in finding the balance between fashionability and its core and more classic offer. Industry insiders say that Matalan, which in the past has had a good record of gaining market share in womenswear, is now understood to be stalling.
The new buying team, which is spearheaded by former M&S buyer Jane Hotz, should see the retailer more focused this autumn.
10 June 2003
www.matalan.co.uk
Matalan to expand service
British clothing discounter Matalan wants to expand its online services. Up till now customers could order products on the Matalan-website, but had to collect their purchases in a Matalan store nearby.
Now the company is making plans to deliver orders that were placed online, directly to the home, a spokesperson said this week. The company did not give a date when this service will be up and rolling.
January 10, 2003
www.matalan.co.uk
Matalan meets forecasts
Sales for Britain's leading budget clothes retailer, Matalan, improved and the
half-year profits the company announced this week met with earlier forecasts.
The fast-growing, out-of-town retailer said pre-tax profits grew 9% to GBP 53.6
million in the half year to August 31 compared with forecasts of GBP 50-55m.
However, the main focus will be on like-for-like sales growth of 8.9% in the
seven weeks to October 19. That was much stronger than predicted and up from
4% growth during the previous six months.
Matalan said its gross profit margin was also in line with expectations. The company's shares have fallen 37% on trading worries in the past three months.
October 24, 2002
www.matalan.co.uk
Matalan sales slowdown after strong first half
Matalan plc, the rapidly growing British clothing and home furnishing discounter, said its first half results were at the top end of expectations, but that business had slowed in the first weeks of the second half. It will miss previous targets for sales and margin performance after a sharper than anticipated slowdown in recent sales, sending the shares tumbling 16 per cent. The retailer boasts some of the highest sales and earnings growth rates in the sector, supported by an aggressive expansion plan and new product areas such as homewares and children's wear.
In the first six months to 25 August 2001, London-based Matalan saw turnover increase by 50.3 % to GBP 385.2m. On a like-for-like basis, turnover was up by 10 %. In the first nine weeks to 27 October 2001, however, like-for-like sales increased only by 5.2 %. Pre-tax profit increased 41.1 % to GBP 49.4m in the period.
Finance director Ian Smith says it was unlikely the group would meet full-year targets of 10 per cent same-store sales growth and be able to hold its profit margins steady. The shares tumbled 16 per cent or 70p to 360p by 1047 GMT. Smith forecast full year underlying sales growth of 6-7 per cent and said gross margin was likely to drop to 41 per cent from 42.2 per cent last year. Margin has suffered as a result of the changing sales mix which now includes more homewares.
The out of town retailer, which acquired jeanswear brand Lee Cooper in July for GBP 41.8m, said it continued to benefit from its strong value for money concept and had increased the number of customers that have become Matalan members from 1.2m to more than 7.5m.
Meanwhile, Matalan shares are like a roller coaster, they peaked at 800p last November but fell sharply in January amid signs of margin pressure and have been one of the worst performing retail shares in Britain so far this year. Confidence was also damaged by the shock departure of long-serving boss Angus Monro earlier this year, which has left a management vacuum.
Matalan eventually hopes to move into continental Europe and sees the potential to grow its UK store base from 141 to 240.