Outlook: Discounts pay off for clothes retailers

IF EVER further evidence were needed that Britain has turned from a nation of shopkeepers into an army of bargain hunters, then yesterday's soaraway results from Matalan surely provided it. Driven on by the media and political campaign on rip-off prices, together with the possibility of a Wal-Mart inspired price war, Britain's shoppers now prowl the high streets mad-eyed and foaming at the mouth, desperate to hunt out the keenest prices.

How they love this new found frugality round at Matalan. A virtual unknown until a couple of years ago, this discount retailer now has a bold expansion plan aimed at making it Britain's second largest clothing retailer to Marks & Spencer. Like Archie Norman at Asda, Matalan claims its inspiration came from Wal-Mart. The company was set up after its founder visited some of Wal-Mart's US stores.

John Hargreaves, a former market trader, established Matalan in Skelmersdale 14 years ago and now has a business worth nigh on pounds 1bn. The key is low prices with a claim to be up to 40 per cent cheaper than high street rivals. The secret, it says, is in the buying. Matalan buys direct from factories across the globe rather than through agents or middle men, who add on their mark-up. If it was all that simple one might wonder why everyone isn't doing it. As it is, Matalan looks like a company which has found the holy grail.

But perhaps a part of its success is rather more prosaic, for it has also benefited from coming to the stock market at a sensible price. Floated last May when the stock market was was getting jumpy about the retail sector, the shares were priced cheaply at 235p. Now they stand at 1047.5p, making it one of the best performing new issues of recent times.

Sadly, the same cannot be said of Monsoon, the upmarket fashion retailer whose drip feed of bad news has given new meaning to the phrase `it never rains but it pours.' With profits down for the first time in 13 years, the shares now stand at a fraction of the issue price. This is no surprise. At the insistence of the chairman and founder, Peter Simon, the shares were priced far too highly in the first place. It was always obvious that the company's margins were unsustainable.

Even so NatWest Securities managed to find enough mugs to get the issue away. The company had already been forced to abandon its float plans once before because of investor scepticism. It's now going to be doubly more difficult for Mr Simon to re-establish his City reputation. The kindest thing he could do is to take the company private once more, notwithstanding his insistence that his priority is to restore shareholder value.

u

Life and Style
Customers can get their caffeine fix on the move
food + drink
Life and Style
techCould new invention save millions in healthcare bills?
Sport
David Moyes gets soaked
sport Moyes becomes latest manager to take part in the ALS challenge
Voices
Mosul dam was retaken with the help of the US
voicesRobert Fisk: Barack Obama is following the jihadists’ script
PROMOTED VIDEO
News
Members and supporters of the lesbian, gay, bisexual, transgender (LGBT) community walk with a rainbow flag during a rally in July
i100
Life and Style
Black Ivory Coffee is made using beans plucked from elephants' waste after ingested by the animals
food + drinkFirm says it has created the "rarest" coffee in the world
Arts and Entertainment
Loaded weapon: drugs have surprise side effects for Scarlett Johansson in Luc Besson’s ‘Lucy’
filmReview: Lucy, Luc Besson's complex thriller
Arts and Entertainment
Jamie T plays live in 2007 before going on hiatus from 2010
arts + entsSinger-songwriter will perform on the Festival Republic Stage
Life and Style
food + drinkThese simple recipes will have you refreshed within minutes
News
Jermain Defoe got loads of custard
i100
News
peoplePamela Anderson rejects ice bucket challenge because of ALS experiments on animals
Arts and Entertainment
tvExecutive says content is not 'without any purpose'
News
A cleaner prepares the red carpet for the opening night during the 59th International Cannes Film Festival May 17, 2006 in Cannes, France.
newsPowerful vacuum cleaners to be banned under EU regulations
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
News
newsChester Zoo have revealed their newest members
Sport
sportLeague Managers' Association had described Malky Mackay texts as 'friendly banter'
News
The video, titled 'A Message to America', was released a day after Islamic State, an al Qaeda offshoot that has overrun large parts of Iraq, threatened to attack Americans 'in any place'. U.S. officials said they were working to determine the video's authenticity
i100
Life and Style
fashion
Arts and Entertainment
tvSpielberg involved in bringing his 2002 film to the small screen
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Business Analyst

£250 - £350 per day: Orgtel: Business Analyst, Bristol, Banking, Business Obje...

Trainee Recruitment Consultant - IT

£20000 - £25000 per annum + OTE £40,000: SThree: Computer Futures has been est...

Generalist HR Administrator, Tunbridge Wells, Kent - £28,000.

£25000 - £28000 per annum: Ashdown Group: Generalist HR Administrator - Tunbri...

Application Support - Enterprise Java, SQL, Oracle, SQL Server

£45000 - £55000 per annum: Harrington Starr: A well-established financial soft...

Day In a Page

Air strikes? Talk of God? Obama is following the jihadists’ script

Air strikes? Talk of God? Obama is following the jihadists’ script

The President came the nearest he has come yet to rivalling George W Bush’s gormless reaction to 9/11 , says Robert Fisk
Ebola outbreak: Billy Graham’s son declares righteous war on the virus

Billy Graham’s son declares righteous war on Ebola

A Christian charity’s efforts to save missionaries trapped in Africa by the crisis have been justifiably praised. But doubts remain about its evangelical motives
Jeremy Clarkson 'does not see a problem' with his racist language on Top Gear, says BBC

Not even Jeremy Clarkson is bigger than the BBC, says TV boss

Corporation’s head of television confirms ‘Top Gear’ host was warned about racist language
Nick Clegg the movie: Channel 4 to air Coalition drama showing Lib Dem leader's rise

Nick Clegg the movie

Channel 4 to air Coalition drama showing Lib Dem leader's rise
Philip Larkin: Misogynist, racist, miserable? Or caring, playful man who lived for others?

Philip Larkin: What will survive of him?

Larkin's reputation has taken a knocking. But a new book by James Booth argues that the poet was affectionate, witty, entertaining and kind, as hitherto unseen letters, sketches and 'selfies' reveal
Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?

Waxing lyrical

Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?
Texas forensic astronomer finally pinpoints the exact birth of impressionism

Revealed (to the minute)

The precise time when impressionism was born
From slow-roasted to sugar-cured: how to make the most of the British tomato season

Make the most of British tomatoes

The British crop is at its tastiest and most abundant. Sudi Pigott shares her favourite recipes
10 best men's skincare products

Face it: 10 best men's skincare products

Oscar Quine cleanses, tones and moisturises to find skin-savers blokes will be proud to display on the bathroom shelf
Malky Mackay allegations: Malky Mackay, Iain Moody and another grim day for English football

Mackay, Moody and another grim day for English football

The latest shocking claims do nothing to dispel the image that some in the game on these shores exist in a time warp, laments Sam Wallace
La Liga analysis: Will Barcelona's hopes go out of the window?

Will Barcelona's hopes go out of the window?

Pete Jenson starts his preview of the Spanish season, which begins on Saturday, by explaining how Fifa’s transfer ban will affect the Catalans
Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape