Matalan profits soar as Monsoon flags

THE CHANGING nature of high street spending was dramatically underlined yesterday by the contrasting fortunes of two clothing retailers. Matalan, the discount retailer announced soaring profits and an aggressive expansion plan, while Monsoon, the upmarket women's fashion group, reported its first profits fall in13 years.

Matalan, which sells cut-priced items like Lee Cooper polo shirts for pounds 8 and Pepe jeans for pounds 20, is now aiming to become the second biggest clothing retailer in the country after Marks & Spencer.

It wants to double its number of stores from 99 to 200 by 2004. Matalan has already nearly doubled its market share from 1.1 per cent to 1.8 per cent in the past year and claims consumer trends are moving in its favour.

"It is becoming fashionable to shop to save money," said Angus Monro, chief executive. "The whole rip-off Britain campaign is helping us as people are increasingly focusing on value."

Richard Hyman of Verdict, the retail consultants, agreed price was becoming increasingly important. "Price is definitely coming more to the fore in retailing ... It is an unstoppable trend that is here to stay. It is becoming harder and harder to raise prices and that plays to the strength of companies like Matalan."

However, he said Monsoon's difficulties were more complex and had been caused partly by unrealistic City expectations after its shares were priced so highly when the group came to the stock market nearly two years ago. "Monsoon is a quality retailer with a loyal customer base and good management," Mr Hyman said. "If a business like that has no future then God help most of the other fashion retailers."

Matalan has proved a spectacular stock market success and its shares soared again yesterday on the back of a huge jump in half-year profits from pounds 6m to pounds 16.4m. Like for like sales rose by 25 per cent. The shares rose by 19 per cent to a new high of 1,047.5p. This compares to an issue price of 235p when the company came to the stock market in May last year.

The surge means Matalan has a stock market value of almost pounds 900m with two-thirds of the shares controlled by John Hargreaves, the chairman and his family. Mr Hargreaves started Matalan from a market stall in Skelmersdale, Lancashire, 14 years ago after a trip to see Wal-Mart in the United States.

Matalan yesterday brushed aside the threat of Wal-Mart's takeover of Asda, saying it was unlikely that Wal-Mart would be prepared to match them on price. It will test five larger format stores of 70,000 square feet next year "to help combat the threat". "We think it will be good for us because it will taken the focus firmly out of the high street into out of town."

The company said it had visited Wal-Mart's store in Germany, and said the clothing offer was "absolute rubbish".

Monsoon reported a fall in full-year profits from pounds 27.7m to pounds 20.4m. Like-for-like sales fell by 7 per cent, though in the 13 weeks to the end of August sales are the same as last year. Margins also fell due to a higher proportion of sales being made in the sale periods.

The shares, priced at 198p at flotation, fell 9.5p to 76p.

Outlook, page 17

Start your day with The Independent, sign up for daily news emails
i100 In this video, the late actor Leonard Nimoy explains how he decided to use the gesture for his character
Arts and Entertainment
Secrets of JK Rowling's Harry Potter workings have been revealed in a new bibliography
arts + ents
Down-to-earth: Winstone isn't one for considering his 'legacy'
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower