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Matalan prioritises online growth as shoppers flock back to stores

The new chief executive of Matalan, Jo Whitfield, has revealed the fashion retailer is focusing on driving its online channel and improving both product choice and price positions for customers amid the ongoing cost-of-living crisis.

Whitfield, who joined the Top50 ranking retailer in March this year, revealed the move to focus more on online growth comes following a market trend shift which has seen shoppers head towards stores.
“We have seen our own online sales step back to an even greater extent,” Whitfield said.

“The business migrated to the THG Ingenuity platform at the end of March with some limited cutover disruption into early April.

“As with any scale project of this nature, we are getting to grips with using a new platform with new functionality and are working with the THG team to learn quickly and respond with the improvements needed to both the platform and the customer offer.”

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However, the comments come as the fashion retailer claimed it is confident it will see a rise in its profits thanks to depressed consumer spending in discretionary categories and unseasonal weather.

In the 13 weeks that ended 27 May 2023, the omnichannel retailer reported an 8% drop in total revenues to £263.6 million, compared with £286.5 million in the same period last year.

For the five weeks to 1 July 2023, its revenue totalled £122.5 million, up from £116.1 million.

However, the retailer added that it expects to report an EBITDA for its current financial year of between £60 million and £65 million.

“Building a strong leadership team to take the business forwards has been a key focus for me in my first three months in the role,” Whitfield said.

“I am excited that the team are now in place and is bringing the strength of their impressive retail experience into play as we get moving on the opportunities to underpin profitable growth. They have landed with immediate positive impact and are weighing our activities and focus across the business in areas such as design, ranging, sourcing, supply chain, people and omnichannel operations.”

She added: “As the new leadership team came together and the initial changes we have made started to take effect and as the weather improved, we have been able through June to reduce the cumulative EBITDA gap to last year from £18.1 million to £2.9 million. We are also confident of strong year-on-year profit improvement across the remainder of the year.

“In addition to a challenging market backdrop, internal operational challenges created a gap in the market in the first quarter. We have two key areas of focus, those being driving our online channel, and improving both product choice and the strength of our price position for customers.”

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