Matalan mulls job cuts

Matalan is expected to begin consultation with staff this week, which will result in job cuts, both in stores and at the head office. A press report over the weekend said that the leading UK's leading discount clothing retailer has already announced job cuts internally, but will not confirm how big the cuts are until the consultation with staff has been completed in 30 days. However press reports have put the projected cuts in the hundreds. Matalan employs 16,800 people.

It is understood that the cost of any job losses would be absorbed by the savings made by reorganising staff.

The retailer announced a cost cutting review of the business in April, followed by a fall in like-for-like sales of 8.8 per cent in the two months to the beginning of May.

Shore Capital analyst John Stevenson said he expected like-for-like sales to decline over the first half of the financial year by about 5 per cent to 6 per cent, against strong comparables in the previous year. He acknowledged the commitment to structural efficiencies, but doubted the retailer would gain any benefits in the short term.

He said: 'We are mindful of the consistent improvements that the management team continues to make to the business, in terms of stores, range, processes and supply chain. Unfortunately in the current market conditions, we suspect it may be some time before the benefits of such actions become more apparent.'