Value fashion group Matalan has posted a quarterly sales decline and warned that trading conditions remain tough, despite an uptick in July.
The retailer told bondholders that total sales fell 2.7% to £268.1m in the quarter to May 28, when EBITDA from continuing operations was £27.6m.
Matalan chief executive Darren Blackhurst said: “While our financial performance has been challenging in the first quarter and we expect these conditions to remain for the near future, there are many reasons to be confident and excited about the long-term future for Matalan.
“The brand has real equity with customers from a value perspective, there is considerable latent potential within our core business and the opportunity for future expansion remains. The fact is, customers face tough times at present.”
The retailer recorded growth “through to the middle of May, however in the last two weeks of the period sales performance lagged against last year’s very strong comparatives”.
Matalan reported: “Trading conditions remained challenging in June, particularly in the face of earlier competitor Sale activity. July results to date show some improvement in trading.”
The retailer said: “Against this backdrop, we are applying additional focus to our price positioning and are investing in delivering keener prices and an even clearer proposition to our consumers.
“Our priority is to remain competitive while providing value and quality to our customers; and we have a renewed focus on exceeding our customers’ expectations in the areas of product design, price and quality in a way that is easier to communicate and understand.
“Although we are unlikely to feel the improvements this year, we have seen a stabilisation of input cost prices which should allow us to plan with more confidence for next year.”
Online sales doubled on the same period last year.