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Matalan planning to grow online business

Value fashion and homewares group Matalan is to ramp up its ecommerce operations and plans to hire a top-level online retail specialist to drive growth.

Privately owned Matalan is seen as a late entrant into the fast-growing online market, having only launched a transactional website in 2009.

Now, as store sales fall across the retail sector while online continues to grow, observers say few retailers can afford not to develop their multichannel presence.

A source familiar with the situation said the Matalan ecommerce role would be at an “elevated level” of management but the search for suitable candidates was at an early stage.

Matalan opened a new model store format in November in High Wycombe, which is piloting a kiosk service that gives customers access to its entire product range in-store, including online exclusives.

The self-service kiosks also enable customers without internet access to shop on its website.

When Matalan began to sell from its site the range was limited to 3,000 SKUs, according to Retail Week Knowledge Bank, and was targeted at more fashion-conscious customers than the in-store average.

In mid-2009, Matalan indicated that its average transaction value online was £28, compared with £20 in the shops.

Retail Week Knowledge Bank director Robert Clark said: “Annualised sales of the order of £25m are postulated for 2010, although the order of magnitude is considered likely to advance rapidly and a figure of £50m per year achieved within a relatively short time.”

Matalan is likely to have encountered the same challenge as some other value retailers in reconciling the costs of online development and fulfilment with its low price points. Big name value specialists, most notably Primark, have chosen so far not to sell online.

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