Matalan to cut jobs amid slowdown

DISCOUNT clothing chain Matalan has confirmed it is planning to cut jobs as part of attempts to cope with the slowdown in UK spending.

Matalan, which has almost 17,000 staff, said it has begun a consultation process with workers, but added it was too early to speculate about how many jobs might go. Reports suggest the figure could be in the hundreds.

The review, which will involve the head office at Skelmersdale, Lancashire, and the chain's 190 stores, had been expected after management said in May that it would look for greater efficiencies in a 'toughening marketplace'.

The most recent update on like-for-like sales showed a 9% fall in March and April and was accompanied by a warning that annual profits would be at the bottom end of expectations if the tough conditions continued.

A spokeswoman said: 'I can confirm that Matalan is carrying out a restructuring that will result in job losses. However, it is impossible to be specific until the consultation period is completed.'

Matalan's actions are likely to be mirrored elsewhere as a report last week said up to 150,000 jobs could be lost in the sector over the next five years. Higher interest rates, a stagnating property market and rising debts have been blamed for the spending slowdown, which is already thought to have claimed up to 8,000 jobs this year and sent a number of firms to the wall.

The downturn arrived just as Matalan showed signs of an improved performance, after a turnaround strategy helped lift annual profits by 31% to £83.5m.

In the current financial year, which started at the end of February, analysts had been looking for profits in the region of £85m-£100m, but chief executive John King has since indicated the lower figure. He added last month: 'In a toughening marketplace, our focus over the next 12 months is to manage greater efficiencies into the business.'