Christmas restrictions impact sales at Matalan
Matalan has reported a 21.4% sales drop in the latest quarter, partially due to the four-week lockdown in England throughout November.
The omni-channel fashion and homeware retailer of family value announced its results for the 13 weeks ending 28 November 2020, reporting revenue decreased by 21.5% to £244.8m, compared to £311.5m in 2019.
Revenue also decreased by 34.1% to £578.1m in the 39 week period (Q1-Q3) ending 28 November 2020. Matalan’s closing cash climbed 76.5% year on year to £184.9m in the 13 weeks.
Matalan also reported that sales took a hit during the crucial Christmas trading season, as store were again forced to close, adversely impacting trading with online sales failing to make up for losses.
Revenue at Matalan in the five weeks to 2 January 2021 dropped 11% to £119.2m, compared to the same period last year.
The retailer reported 84% growth in online sales during the same period, with Boxing Day Sale entry volume 14% lower the year prior.
Commenting on performance Steve Johnson, Executive Chairman of Matalan, said: “Today’s results reflect the severe COVID-19 related disruption to store trading throughout November as Government restrictions required us to close completely or trade only “essential” ranges within stores. This followed a period of robust autumn trading in September and October, within which full price sales grew against last year and customers continued to feel comfortable and reassured in our large, convenient and safe store environments.
"Throughout the entire quarter the online channel delivered strong growth, benefitting from the hard work done during the year to increase capacity both in the supply chain and also via the enablement of online order fulfilment from stores. This represents an important step in our ongoing journey to becoming a truly omni-channel operation.
"All of our stores across the UK re-opened during December, and performance prior to further restrictions being announced was strong, as customers sought out true value, against an uncertain consumer, economic and political backdrop. Although COVID-19 restrictions again closed 62 of our stores from the 19 December, and a further 30 from Christmas Eve, we launched our main winter Sale online and in our remaining stores on Boxing day, with entry volumes below last year.
"Since Christmas, the COVID-19 landscape has deteriorated significantly with all of our UK stores once again mandated to close on the 4 January for an uncertain duration. As such we remain very cautious about the months ahead and are working with our key stakeholders to manage the business accordingly, focussing on optimising online performance, cash preservation, working capital management, and minimising costs."
