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Matalan Recalls Baby Clothes for ‘Choking Hazard’ After Positive Q2 Report

A product recall dampened a positive quarter at Matalan, the Liverpool-based fashion and home goods retailer with hundreds of stores across the U.K.

On Friday, the retail chain issued a recall for infant’s clothing that fails “meet our usual high standards for quality and safety.” It urged consumers who purchased Panda Pocket Dungarees between June 14 and Oct. 7 to return the garment for a full refund, noting that “poppers” on the garment “may become loose” and “could present a choking hazard.”

The safety recall comes after Matalan reported second quarter results showing strong traffic when stores reopened.

It urged consumers who purchased Panda Pocket Dungarees between June 14 and Oct. 7 to return the garment for a full refund, noting that "poppers" on the garment "may become loose" and "could present a choking hazard."
Matalan recalled the Panda Pocket Dungarees over “poppers” that pose a potential choking hazard when loose. Matalan

In a Nutshell: In reflecting on the retailer’s second quarter results, executive chairman Steve Johnson said customer response “quickly cleared much of the winter stock overhang, allowing our focus to be on new ranges during the summer.” He said appetite for new outfits supported 25 percent growth in full-priced sales versus the year-ago period.

“Customers loved our fantastic dress ranges and choice of tops for every occasion and we saw a real recovery in smart and formalwear as more people returned to the office and freshened up their work wardrobe. Pleasingly, this strong full price performance was mirrored across both stores and online, contributing to a further build of market share over the period,” Johnson said.

The Liverpool-based fashion and home goods retailer has started introducing new and expanded ranges within its home categories, and has included a greater selection of home merchandise in more stores. “This extension in choice and convenience has been well received by customers,” Johnson added.

However, supply chain disruption is delaying the flow of stock into the U.K., and adding extra costs in the process.

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“We are working closely with suppliers and partners to manage and mitigate the effects of this. The combination of the negative impact of product delays coupled with the very positive reaction of our customers to great new product when it does arrive means that we expect availability to remain somewhat compromised over the coming months,” Johnson said.

The company finished the first phase of automation at its Knowsley warehouse. “This significant piece of change will further boost our capacity to support and sustain our rapid growth online in addition to providing greater agility, efficiency and improving service for customers as we move into next year,” Johnson said. “We’re already underway with planning the next phase on the journey to further improve our supply chain and digital capabilities as we transition Matalan into being a truly multi-branded omnichannel lifestyle retailer.”

Net Sales: Total revenue for the quarter ended Aug. 28 rose 3 percent to 264.7 million pounds ($365.4 million) from 258.0 million pounds ($356.2 million).

For the six months, revenue rose 46 percent to 486.5 million ($671.5 million) from 333.3 million pounds ($460.1 million).

Earnings: Profits for the quarter were 11.6 million pounds ($16.0 million), against a net loss of 22.7 million pounds ($31.3 million) in the comparable year-ago period.

Matalan said restated earnings before interest, taxes, depreciation and amortization profit under International Accounting Standard Rule 17 was 38.9 million pounds ($53.7 million), versus 3.4 million pounds ($4.7 million) a year ago.

For the six months, the company reported profits of 2.3 million pounds ($3.2 million) against a net loss of 76.5 million pounds ($105.6 million).

Chairman’s Take: “Whilst our priority remains immediate trading and recovery, we have continued to progress our strategic growth and development plan in parallel. Our scale, market positioning and loyal customer base, added to the resilient popularity of our convenient out of town store formats, and rapidly growing online business, offer the opportunity to add further range breadth and choice for customers in relevant and adjacent categories,” Johnson said.