Matalan warns as prices slashed

13 April 2012

DISCOUNT retailer Matalan hit the City with another profits warning today, a month after its shock pre-Christmas earnings alert.

Chief executive John King said there had been no improvement in trading conditions since mid-December, forcing the group to slash prices to shift unwanted stock.

Its shares, which stood as high as 800p three years ago, tumbled 11 1/2p to 158 1/2p today.

Like-for-like sales for the five weeks to 10 January fell 5%, leaving the drop for the 19-week period at 6%.

Gross margins have slipped by 1.7%. Before December, analysts had expected profits of £110m for the year to February.

That was cut to between £75m and £85m, but the group warned today that profits are likely to drop to between £60m and £70m.

Price cuts have been raised to 75% on clothing and the half-price homewares sale starts this weekend.

King said the group, which is generally about 50% cheaper than its High Street rivals, has improved its product ranges and also sharpened up prices in response to the discounting activity by High Street rivals.

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in