Matalan sales better than forecast

FORMER stock market darling Matalan has pleased investors with better-than-expected Christmas sales figures. Like-for-like receipts grew 9.2% in the six weeks to 5 January.

Including new space, the fast-expanding discount retailer's sales were up 31.7%. Children's wear and homeware - pots, towels and linen - were the strongest performers, said finance director Ian Smith, but the core fashion lines were doing only 'okay'.

The festive splurge helped lift underlying sales for the first 19 weeks of the second half by 6.9% - better than analysts' forecasts of between 5% and 6% but pedestrian compared with 13.4% last time.

The shares rose 10p to 323p despite a warning that heavy marketing costs had squeezed the gross margin. Based in out-of-town stores, Matalan has to advertise to maintain customer traffic. The group plans to open between 17 and 20 new stores this year.