Matalan drives & # 39; distressed & # 39; store market with discounts on Blitz during Christmas

Matalan is the latest in a range of retailers to admit that it has stepped up its discount campaigns in the run-up to Christmas in an effort to reach careful buyers.

When he joined John Lewis and Quiz, Matalan said today that a sales increase during the festive season was partly caused by a planned increase in promotions and sales.

The economical fashion and home retailer attributed a 4 percent jump in sales to £ 148 million for a wave of online spending – an increase of 33.3 percent, compared to a 1.6 percent increase in its 217 stores.

Matalan said sales for the quarter rose 4.9%, but profits fell 11% to £ 40 million

But the promotional blitz, along with the headwind of currencies, has looked at the bottom line. During the last three months, Matalan's profits slipped 11 percent to £ 40million.

It now expects full year revenues to be in the order of £ 100 million to £ 102 million, a little lower than the £ 104.5 million it reported a year earlier.

Jason Hargreaves, the manager of the value chain, said: & # 39; In the run up to Christmas, the market became increasingly confused and we benefited from a planned increase in our promotional sales mix.

We also tactically used our database of 12 million active customers to focus exclusive offers and discounts on further support of the trade plan. & # 39;

He said that there was no material dilution & # 39; Matalans full price sales, which were 0.5 percent lower than in the Christmas period last year.

Last week, High Street John Lewis Lewis warned that it might not be in a position to pay out his esteemed employee bonus this year after heavy promotions have eaten in the margins of Christmas.

Matalan's boss Jason Hargreaves insisted that the company's strategy & # 39; clearly works & # 39;

Many retailers are struggling with higher expenses due to the weak value of the pound and high wage costs, as well as changing shop habits, weak consumer confidence and declining visitor numbers.

Despite City's opposing expectations, M & S and Debenhams both stuck to their earnings forecasts for the full year when they reported Christmas results last week.

M & S resisted the temptation to take part in Black Friday, which meant that the margins remained intact, while Debenhams made significant cost savings.

Looking ahead, Matalan & # 39; s Hargreaves said: "Although we are cautious for the coming year in what we expect to be a very difficult market, our approach clearly works."

Matalan has invested in the growth of its online activities, while overhauling the retail property and making its activities more efficient.

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