Matalan’s credit rating was downgraded by Standard & Poor on Tuesday, with one debt facility cut to ‘junk’ status, it is understood.
The discount clothing and homewares retailer last month reported a profit slump of 63% to £13.6m for its second quarter.
Influential credit agency Standard & Poor said Matalan has been hit by high unemployment, inflation and fragile consumer confidence.
The retailer was downgraded one notch to B and Standard & Poor cut the rating on its £225m debt to ‘junk’.
In its second quarter financials Matalan blamed the tough climate, promotional activity and higher input costs for the plunge in EBITDA.