Matalan let down by online sales as it looks to strengthen business

Matalan has reported a 0.8% increase in revenue for the second quarter as it looks to build a "stronger, more modern" business. 

The fashion and homeware brand saw revenue rise to £288.6 million for the 13 weeks ending 26 August, compared to £286.4 million in 2022.

The minimal rise in revenue was largely attributed to the impact of the cost-of-living crisis, with "consumers spending less often and being more considered with their purchases".

Whilst revenue grew 8% in UK stores, the brand's online channel is being "actively targeted for improvement" after revenue dropped 34.7%.

Despite this, profits showed a more significant improvement. Following the adoption of IFRS 16, Matalan's EBITDA lifted 16.6% to £47.9 million against £36.7 million previously.

EBITDA restated under IAS 17 increased 8.7% to £25.1 million, compared to £13.1 million in the second quarter of 2022.

Jo Whitfield, Chief Executive of Matalan, said: "We have delivered a strong Q2 performance against the backdrop of a challenging and volatile retail environment.

"We improved our profitability year-on-year, driven by a solid sales performance, tight control of markdown, effective cost management and positive movements in input prices.

"We have worked to develop a clear roadmap of business improvements across the short term whilst detailed work has begun on developing our long-term strategy.

"We are focused on initiatives that will open up material growth opportunities in the years ahead, while working at speed to deliver better choice, value and experience for our loyal customers."

Whitfield was appointed as CEO of Matalan earlier this year,  following the takeover of the business by its former lenders.