Matalan tackles its debt payment

Matalan said it is ahead of schedule on its debt repayments, amid rumours of tough trading.

The retailer told Drapers this week that it was on track to meet its targets and that senior managers were pleased with first-half performance. This is the first trading indication the retailer has given since it delisted last December.

A source close to Matalan said the company had already repaid about £47 million worth of debt, but he warned that current trading was soft. He added: "Matalan is pinning its hopes on Christmas performance and it has attached some big numbers for growth in that period."

Matalan was taken private in a £317m deal led by founder John Hargreaves. It faced competition from high street value specialists, including Primark and Peacocks, and sales were flat at about £1 billion.

The chain, which has 194 shops and six clearance stores in the UK, axed 80 jobs in March as part of a cost-saving initiative.