Trading Statement

RNS Number:1170T
Matalan PLC
11 December 2003


Embargoed until 7.00am Thursday, 11th December 2003



                                TRADING STATEMENT
                                        
As disclosed at the time of the interim results announcement on 7th October
2003, total sales in the first 5 weeks of the second half grew by 16.2% and like
for like sales by 5.7%. Since then trading conditions have deteriorated. In the
14 weeks to 6th December 2003 total retail sales grew by 2.4% with like for like
sales down by 7.0%. The reduction in like for like sales is made up of 1.2%
fewer transactions and a 5.8% lower average basket value. Gross margins for this
14 week period are up 0.2% year on year.

The result for the full year will depend upon the remaining Christmas trading
and the critical end of season sale activity that commences on 26th December. At
this stage however, the Board considers it unlikely that the shortfall in sales
to date will be recovered in the remainder of the financial year. The Board now
expects that pre-tax profit for the year to 28th February 2004 will fall
materially short of market expectations.

The key component of the lower average basket value per customer is lower
average selling prices. Consumers have bought fewer higher priced items, such as
winter coats and leather jackets, throughout the crucial early winter trading
period. This, the board believes, is a trend that is being felt across the wider
market. Although sales of lower priced items have performed better, particularly
the improved Christmas gift and accessories ranges, this has not been sufficient
to offset the reduced sales of higher priced items.

Historically, Matalan's most important Christmas trading period is November.
Given the strong performance at Matalan in October a year ago, the company had
anticipated a negative like for like sales performance during that month. A
strong trading performance in November was therefore critical to a successful
Christmas.

Over the last 7 months, the new management team has been working hard towards
re-establishing the core strengths of Matalan as a low cost retailer. The second
half was the first opportunity to correct some of the problems of the past.
Customer numbers and market share have both been increased. Membership currently
stands at 10.3m (2002: 8.9m) and market share has grown across all key areas
both by volume (6.5% vs 5.9%) and value (3.1% vs 2.9%). There is still much to
do, however the Board believes that the management team are taking the actions
required to get the business back on track.

Matalan will update the market on its trading performance again on 14th January
2004.

Enquiries:

Tulchan Communications - 020 7353 4200

Kirstie Hamilton

Katie Macdonald-Smith





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