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Last Updated: Wednesday, 4 May 2005, 12:00 GMT 13:00 UK
Matalan woos cautious shoppers
By Will Smale
BBC News business reporter

Matalan clothes
Matalan's clothes are aimed at those who love a bargain
Budget clothing retailer Matalan is not somewhere you shop so you can proudly walk down the street with one of its carrier bags.

It is instead popular with bargain-hunting customers who demand and find value for money.

Yet with Matalan just announcing a 9% decline in sales over the past two months, could something be amiss at the company and its more than 170 out-of-town stores?

It may win on price, but are its clothing lines attractive?

Eric Musgrave, editorial director of fashion business weekly magazine Drapers, says Matalan is simply being hit by the same slowdown in consumer spending that is affecting all clothing retailers, be they discount, mid-market or luxury.

"After five to six years of buoyant growth in the clothing sector, everyone is now being affected by a slowdown in sales," he says.

"In that respect, Matalan's latest results are not surprising."

With interest rates having risen five times in the past one-and-a-half years, it appears many indebted households are now feeling the pinch. Paying off their credit cards is taking precedence over that new top or pair of jeans.

Supermarket pressure

Yet with shoppers now less happy to part with their money, some would expect that Matalan's sales would be rising as it won customers from the more expensive high street chains.

Matalan store
There is always going to be a balance between price and quality, but its clothes are fine
Retail analyst Eric Musgrave

Unfortunately for Matalan and its rivals in the value clothing sector, the supermarkets appear to be happily picking up this business with their own rock-bottom fashion prices.

"The great advantage the supermarkets have is the massive footfall they get," says Mr Musgrave.

"And once they have got people into the store to do their weekly shop, they have to walk past all the clothing lines and other non-food items before they can get to the grocery aisles.

"It is therefore all too easy for the supermarkets to tempt their customers to have a look at the clothing.

"With Matalan you have to make a conscious decision to drive there, but with the supermarkets you can add an item of clothing to your shopping basket on a whim."

Cheap..and nice

But Matalan has its loyal and happy customers.

MATALAN FACTS
Matalan clothing
Established in 1985
First store in Preston
Floated in 1998
More than 170 stores

Julia Morgan, fashion editor at Woman's Own magazine, said her readers certainly remained big fans of Matalan.

"Your typical Woman's Own reader is not concerned with having their finger on the exact pulse of fashion, and Matalan offers them great value for money.

"They certainly don't mind not having an expensive brand name, or wearing a style that is apparently last season."

Mr Musgrave describes Matalan's clothes as "perfectly reasonable"

"There is always going to be a balance between price and quality, but its clothes are fine.

"Even in the value sector, retailers cannot put out horrible clothes - people love a bargain, but they are not going to buy something just because it is cheap - they have to want to wear it too."

Others, such as Charlotte Jones, fashion assistant at men's magazine FHM, believe that while Matalan's clothes are wearable, they are not the most fashionable in the budget sector.

"Primark is certainly the best as far as my friends and I are concerned," she says.

"Their clothes really are good.

"Whereas Matalan, I must admit I've never been to one."



SEE ALSO
Matalan slowdown after 2004 surge
04 May 05 |  Business
Matalan shakes off retail gloom
02 Mar 05 |  Business
Takeover rumour bolsters Matalan
07 Sep 04 |  Business
Boss defends Wal-Mart's record
02 Sep 04 |  Business
Sales slump hits Matalan profits
05 May 04 |  Business
Matalan spreads Christmas gloom
11 Dec 03 |  Business

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