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Reduced discounting lifts Matalan's profits

Matalan’s parent company, Missouri Topco, reported a 37% jump in EBITDA before exceptional items to £77m for the year to 25 February, as the business focused on full-price sales.

Matalan aw17 (145)

Matalan aw17 (145)

Revenue before exceptional items edged down 2% to £1.03bn. The business said a full-price sales was prioritised over growth during the year and there was a “significant increase” in the full-priced sales mix.

The retailer said a “tight buy” coupled with less discounting reduced markdown costs and led to a “healthy stock position” at the end of the year.

An improved supply-chain performance also led to better availability in stores.

Distribution costs fell after the retailer fixed problems at its warehouse in Knowsley.

The impact of wage rate inflation within selling and distribution costs was fully offset by the productivity savings within the supply chain and store operations.

Four new out-of-town stores were opened during the period in Christchurch, Southampton, Fareham and Charlton, south-east London, and one store was closed. Matalan also launched its Home Extra format in three stores.

Fifty stores will be refurbished over the next 12 months, featuring new fixtures to better segment brands, improved lighting and general modernisation.

Matalan has 227 UK stores, five of which are outlet stores.

Online sales during the period increased by more than 60%. A figure for online sales was not provided. A new online platform will launch later this year.

Matalan added two new franchise partners in Armenia and Malta, during the year, taking the total international franchise stores to 25.

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