PROFITS leapt by 90% at Skelmersdale retailer Matalan as it continues with a cautious store opening programme.
Sales increased 8% to £1.1bn in the year to February, which the value retailer said was at “the top end of our peer group comparisons”, while pre-tax profits soared by nearly £50m to £103.2m.
John Hargreaves started his empire with a market stall in Liverpool more than 40 years ago, with the first Matalan store opening in Preston in 1985. The value retailer now has 205 stores, including six in Merseyside.
In accounts just filed at Companies House, its directors attributed the growth to the “resilience of the UK value retail sector” as well as the company’s refocused strategy.
They said: “Sales growth benefited from the continued roll out of our Good-Better-Best strategy, delivering a wider price architecture supported by our sub-brands, giving our customers more real choice.
“The store environment benefited from improved presentation, particularly of our sub-brands, showcased within our innovative ‘shop-in-shop’ formats, which has been delivered from our ongoing store investment programme.”
Matalan has spent £70m on store improvements since 2007, and said it has now “substantially completed” its refurbishment programme, with just 15 of 195 identified stores still requiring work.
It opened three UK stores last year and expects to open at least six in this financial year. It also opened two stores in the Middle East, in Dubai and Jordan, and plans to open two more with the same franchise partner this year.
The business, which employs around 16,600 staff, secured a £525m funding package earlier this year from investors after abandoning attempts for a sale.
It is putting the proceeds of the deal into its growth strategy, while also financing an estimated £250m payout to Mr Hargreaves.
Mr Hargreaves is a long-standing patron of the NSPCC – his £6m donation kick-started the fundraising for the NSPCC’s Hargreaves Centre in Great Homer Street, which opened in 2007 – and the company donated a further £300,000 to the children’s charity last year.
