MATALAN, the discount clothing retailer, continued to face difficult trading conditions after reporting flat sales for the past nine weeks.
The chain said like-for-like sales were 0.1-per cent lower in the period, although it increased margins.
The update came ahead of Matalan's annual meeting, which has attracted extra interest after it emerged last Friday that chairman and founder John Hargreaves is considering an offer for the rest of the company. It also emerged that Hargreaves believes the company's proposed dividend is too generous when compared with others in the retail sector.
These revelations have added some spice to the normally sedate annual meeting. It has even been reported that Harris Associates, which owns 6.9-per cent of the company, planned to oppose the re-election to the board of Hargreaves, who controls 53-per cent of the company in conjunction with his family.
The company declined to comment on matters relating to the possible takeover offer from Hargreaves.
Richard Ratner, analyst at Seymour Pierce, said: "If press comments about the board not recommending anything from Hargreaves under 200p a share are correct, then the chance of it actually happening appears somewhat remote."
Analysts agreed that the update offered some encouragement, as they had been expecting a fall in sales of around 2-per cent. The drop of 0.1-per cent is also an improvement on the 1.1-per cent seen across the past 18 weeks.
Chief executive John King said he believed UK consumers remained cautious, although he hoped the downturn in confidence may now have bottomed out. He added: "The pressures we have talked about are still there on consumers - whether it be taxation or utility bills. There's still some caution out there."
In clothing, Matalan said its market share remained at 3-per cent, as a result of improved ranges and better marketing. It has also continued to reposition its homeware operation, with existing ranges being cleared ahead of the introduction of new stock later in the year.
Shares in the chain eased 3.25p to close at 171.75p.
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