Matalan says its ongoing warehouse automation will help to support its fast online growth.
The value fashion and homewares retailer, ranked Top50 in RXUK Top500 research, has now completed the first phase of automating its Knowsley warehouse – and says that will give it extra capacity for an online business that has grown quickly during pandemic lockdown and restrictions.
“This significant piece of change will further boost our capacity to support and sustain our rapid growth online in addition to providing greater agility, efficiency and improving service for customers as we move into next year,” says Steve Johnson, executive chairman of Matalan. “The execution by the team on this project has been fantastic and I give them my thanks for their many months of hard work and commitment. We’re already underway with planning the next phase on the journey to further improve our supply chain and digital capabilities as we transition Matalan into being a truly multi-branded omnichannel lifestyle retailer.”
The update comes as Matalan is experiencing supply chain problems, and as it this week reported sales of £264.7m in the 13 weeks to August 28 2021. That’s up from £258m the year earlier. Earnings before interest, tax and asset write downs (EBITDA) came in at £61m, up from £28.5m a year earlier.
Supply chain issues
Supply chain problems have delayed the arrival of stock into the UK and increased costs, says Johnson – and that’s likely to affect availability in coming months. “We are working closely with suppliers and partners to manage and mitigate the effects of this,” he says. “The combination of the negative impact of product delays coupled with the very positive reaction of our customers to great new product when it does arrive means that we expect availability to remain somewhat compromised over the coming months.”
Johnson says the results reflect the first full quarter in which all of its sales channels have been fully operational since before the pandemic. “Having seen a terrific customer response to stores re-opening in the spring, we quickly cleared much of the winter stock overhang, allowing our focus to be on new ranges during the summer,” he says. “As a result, despite customer footfall being affected by the so-called ‘pingdemic’, appetite for new outfits remained strong, supporting a growth in full priced sales of 25% against last year.
“Customers loved our fantastic dress ranges and choice of tops for every occasion and we saw a real recovery in smart and formalwear as more people returned to the office and freshened up their work wardrobe. Pleasingly, this strong full price performance was mirrored across both stores and online, contributing to a further build of market share over the period.”
The retailer says its out-of-town stores have been popular with customers while its online business is growing quickly. That means it can expand its range into areas including beauty – recently launched in some stores with brands such as Rimmel and Maybelline – and homewares. The retailer is expanding its homewares range and stocking more of it in more of its stores.
Matalan sells online, through 228 UK shops, mostly located out of town, and 50 overseas franchise stores.