Matalan profits plummeted in the year before its buyout by investors as inflationary pressures “severely impacted its level of performance”.
Sales over the year to 25 February 2023 edged up 12.1% to £1.15bn due to price increases, however EBITDA plunged 37.2% to £124.1m and operating profit before exceptionals spiralled almost 80% to £18.7m.
The retailer was acquired by a group of investors at the end of January 2023 after a fierce battle with founder John Hargreaves.
A Matalan spokesperson said the accounts were “historic” and “do not reflect the current business, under new ownership and leadership, which is focused on ensuring the business is on a much more solid footing”.
The retailer hired former Co-op Food CEO Jo Whitfield as CEO and ex-Lidl boss Karl-Heinz Holland as chair to lead its transformation early last year.
Matalan revealed last October its EBITDA came in at £47.9m in its second quarter, with sales up 0.8% to £288.6m, which it attributed to the improved profitability to its sales performance, tight control of markdown, effective cost management, and positive movements in input prices.
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Whitfield has focused on making Matalan the “first choice for value” for families, and has pushed ahead with building stronger product assortment, improving the ease of shopping, and enhancing value.
It bolstered its online offer by adding 10 new third-party fashion brands to its website late last year, including Quiz, Yumi and Vanilla with more planned in 2024.
The fashion chain also invested £35m into lowering prices on more than 700 products, which it said it had unlocked through a more collaborative buying and sourcing strategy and by passing on reduced input costs as inflation falls.
Matalan will report its full year results for the current trading period in June.
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