Sales increase at Matalan
In the 8 week period to 26th August, like for like sales increased by 1.3 per cent and total sales for the period increased by 2.2 per cent.
In clothing, like for like sales growth strengthened to 2.1 per cent.Overall gross margins have increased by 0.2 per cent, with bought in margins up 0.8 per cent in the year to date, despite the clearance activity within the Homewares area.John King, Chief Executive, said: “I am encouraged that, given tough trading conditions, we continue to grow our core clothing business whilst maintaining our focus on driving improved cashflow and business efficiencies”.
Matalan surprised the market with an upbeat trading statement for the 26 weeks to August 26 that showed like-for-like sales had fallen only 0.5% against forecasts of mucch worse. And for the most recent 8 weeks of this period sales increased by a decent 1.3%. This represents good and bad news for chairman John Hargreaves and is supposedly imminent bid for the company. Although it means he is even more likely to have to pay a full price to take the company private the positive is that the banks will undoubtedly be more forthcoming with finance to back his bid. Matalan shares are up 5% to 179.25p on the news, clearly removing some of the premium that Hargreaves would be providing shareholders if his bid came in at the rumoured 200p per share.
