Five key issues in fashion retailer's preliminary results
Matalan's preliminary results tomorrow will spark a huge amount of interest as the value clothing retailer struggles to maintain its turnaround. Pundits expect the retailer, which is viewed as a barometer for that sector, to file a report that reflects the widespread consumer gloom.

  • Expected announcement on jeans business.

    Matalan is expected to announce the sale of its Lee Cooper jeans business. The division has been valued at£20 million.

  • Current trading.

    Expected to be subdued with optimistic estimates of flat like-for-like sales.

  • Trading during period just finished

    Even though the retailer's performance may be struggling, it could still look good against weak comparatives last year. The retailer posted a slump in preliminary pre-tax profits of£60.7 million last year, from£117.4 million in 2003. Analysts predict pre-tax profits to reach about£84 million.

  • Margin recovery

    Analysts praised the retailer's improvements on ranging and they expect some improvement on margin. However, Matalan has faced increased competition from grocery chains such as Tesco and Asda, which have both invested heavily in pricing. Marks & Spencer has also moved to a sales-driven strategy in the past year.

  • Profit warning?

    The combination of price deflation, increased competition and a slowdown in consumer spending has prompted some analysts and press to predict the retail will issue a warning on profits.

For details of Matalan's full year figures, log on to tomorrow morning and for a detailed analysis on the retailer's performance, read next Friday's edition of Retail Week.