Like-for-like sales rise at Matalan
05 September 2006 09:09
In the eight weeks to August 26, Matalan has improved like-for-like sales by 1.3%, an improvement from the 0.1% decline from the previous nine weeks. The company stated that the repositioning of its homeware offer had continued, with the aggressive clearance of existing ranges resulting in a consequent dilution in gross margin. "This clearance", it said, "will make way for new ranges which will be fully represented in storefor the beginning of the second half." The retailer has warned that the trading environment still remains tough however.
Chief Executive John King added, "I am encouraged that, given tough trading conditions, we continue to grow our core clothing business while maintaining our focus on driving improved cashflow and business efficiencies."
It is unclear how the news of improved trading might affect a bid from current Matalan chairman, John Hargreaves, to take the company back into private hands. Hargreaves who already owns 53% of the company, has made an indicative cash offer of 200p per share, which seems likely to be rejected by some shareholders who believe this to be low. The Matalan chairman has been given a month’s extension by the takeover watchdog to finalise his offer which may value the retailer at up to £817m.
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