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Matalan Q2 profits rebound, but warns of supply chain disruption

By Huw Hughes

21 Oct 2021

Business

Image: Matalan, Facebook

Matalan has seen its profits rebound in the second quarter of the year amid an uptick in revenue, but warned that continued supply chain issues will impact its performance.

In the three months to August 28, the British fashion and homeware retailer reported a 2.6 percent increase in revenue to 264.7 million pounds. For the first half of the year, revenue jumped 46 percent to 486.5 million pounds.

The Liverpool-based company made a second-quarter profit after tax and exceptional items of 11.6 million pounds compared to a loss of 22.7 million pounds a year earlier. For the first half, that profit came in at 2.3 million pounds compared to a 76.5 million pound loss the prior year.

Formalwear rebound

“Today’s results reflect the first full quarter of trading across all channels since before the start of the pandemic,” said executive chair Steve Johnson. “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.”

Johnson said appetite for new outfits “remained strong” during the period, and that there was a recovery in smart and formalwear as lockdowns ended.

“Pleasingly, this strong full-price performance was mirrored across both stores and online, contributing to a further build of market share over the period,” he said.

But Johnson also warned the company has been “feeling the impact of disruption within the inbound product supply chain” over the past few months, which has delayed the flow of stock into the UK and added extra costs to the process.

“We are working closely with suppliers and partners to manage and mitigate the effects of this,” he said, adding that he expects availability to remain “somewhat compromised” over the coming months.

Matalan