Matalan has entered its bank’s support unit for struggling business, it has emerged.
The value retailer, which warned that its full-year EBITDA would be around £6m lower than originally forecast in January, has been placed in Lloyds Banking Group’s business support unit which helps troubled companies, The Times has reported. This can happen for a variety of reasons, not necessarily because a business is in distress.
Last month Matalan reported online sales fell by 50.9% to £2.7m in the peak Christmas period ended January 2, while store sales fell by 6.4% to £133.8m. Last year it suffered problems at a new 575,000 sq ft Knowsley distribution centre, which it moved into at the end of 2014, but Matalan has since said the situation is improving.
Managing director Jason Hargreaves said the third quarter results, reported last month, were a significant improvement on the first half of the year and were achieved in a “particularly challenging market”.
“Importantly, our supply chain responded well, demonstrating the progress made by the Liverpool warehouse in delivering better in-store availability for customers. Work is now underway to repeat this improvement online.
“Difficult trading conditions into December such as extremely mild weather inhibited footfall and drove increased discounting across the market,” he said.