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Matalan's credit rating downgraded

Matalan’s credit rating was downgraded by Standard & Poor on Tuesday, with one debt facility cut to ‘junk’ status, it is understood.

The discount clothing and homewares retailer last month reported a profit slump of 63% to £13.6m for its second quarter.

Influential credit agency Standard & Poor said Matalan has been hit by high unemployment, inflation and fragile consumer confidence.

The retailer was downgraded one notch to B and Standard & Poor cut the rating on its £225m debt to ‘junk’.

In its second quarter financials Matalan blamed the tough climate, promotional activity and higher input costs for the plunge in EBITDA.

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