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Matalan makes omnichannel investment a strategic priority as it reports full-year sales growth and narrowing losses

Image: Matalan/PR Shots

Matalan is focusing on developing its omnichannel capabilities in its current financial year, as it keeps pace with the shift online seen during the Covid-19 pandemic. The retailer aims to grow its business and reposition the brand at the same time. It aims to attract younger shoppers – aged between 35 and 45 – through more stylish clothing brands and homewares ranges that are designed for real life occasions. The retailer has also set up an ESG team to focus on delivering its environmental promises.

Omnichannel strategy

The pace of the movement towards omnichannel that it saw during the Covid-19 pandemic is now prompting Matalan to continue to use its existing digital investments – such as the use of RFID that enables it to sell goods held in-store online and replenish more efficiently – while investing further in new technology, automation and digitalisation. It is using pocket sorting automation in its Knowsley distribution centre, where its online orders are picked and dispatched and says it will continue to invest in fulfilment automation and capacity.

Matalan executive chairman Steve Johnson says: “Our stores complement what is now a significantly scaled online business, having grown its turnover by over 50% since the beginning of the pandemic, with lots more potential still to realise. Together, they provide our customers with convenient and flexible access to the great quality and value ranges that they trust and rely on, now more than ever. 

“In parallel to navigating the near term market conditions, we continue to progress our digital transformation programme, building on last year’s first phase of supply chain automation and further developing the planning for the migration of the website onto the THG Ingenuity platform in spring 2023. These developments will drive and underpin further growth in our omnichannel proposition as we move the business forwards.”

Full-year figures

The update comes as Matalan, a Top100 retailer in RXUK Top500 research, this week reports revenue of £1.03bn in the year to February 26 2022 . That’s up by 38% from £744.1m a year earlier. At the bottom line it reports a pre-tax loss of £7.7m after one-off costs of £2.9m. That has narrowed from a pre-tax loss of £131.5m a year earlier.

In the first 13 weeks of the current financial year, revenues have grown to £286.5m from £221.8m a year earlier. The retailer has renegotiated a £60m loan facility that will enable it to refinance its coronavirus government borrowing.

Johnson says the full-year figures represent a strong recovery at a challenging time, marked both by Covid-19 lockdowns and by worldwide supply chain disruption.

“Despite these obstacles and assisted by the support packages provided by the government, we significantly improved our level of performance and profitability in what remain demanding circumstances for both our sector and consumers more broadly,” says Johnson. 

He says that inbound supply disruption and inflation, resulting in weaker consumer confidence, have continued to affect retail. However, it says the value it offers to customers is reflected in its sales. It also recently launched two new womenswear brands, Et Vous and Be Beau, which it says are performing strongly both online and in-store.

“Such strong customer reactions,” says Johnson, “give us the confidence that as our stock flow continues to normalise in the months ahead, we are well placed to capitalise on our market positioning in supporting our customers through these challenging times.”

The retailer also now works with third-party brands to deliver online orders direct to shoppers.

Matalan sells online and through 230 shops in the UK and 53 overseas franchise stores. 

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