Troubled waters – but a wave of success for others

Jul 2 2008 by Bill Gleeson, LDP Business editor

"THERE'S always a problem with Matalan somewhere in the business and there's always an excuse."

They were the words of a City analyst in 2006, before the Skelmersdale- based retail group became disgruntled with the views of such analysts and decided to delist from the London Stock Exchange.

The comments were made in the wake of what was seen then as yet another bad set of figures from Matalan.

Scrolling through the Daily Post’s library of cuttings, it’s plain to see that the analyst was right. Time after time, the company announced to the stockmarket that it is struggling to grow sales and profits and needed to implement cost-cutting to turn things around. Chief executives came and went.

As a result, Matalan’s share price struggled to take off.

And with this week’s news of the latest trading figures, nothing much seems to have changed.

While profits are up, sales are down.

Nobody can blame Matalan for current conditions on the high street, but the fact is, yet again, the only way forward for the company has been through cost cutting.

Sales growth has been almost nil in the past few years, raising the question what place does Matalan have in the market?

The idea of a US-style club retailer appeared innovative 15 years ago. It was reported in the press as the next big thing and indeed club membership numbers grew strongly in the early years – as did the share price in the year or so after flotation.