Value clothing chain Matalan has reported a slump in full-year profits and sales amid heightened competition from the likes of Primark and George at ASDA.

Underlying profits totalled GBP56.7 (US$104.19m) for the year ended 25 February compared with GBP80.5m the year before. Same-store sales slid 6.9% during that period.

Total sales fell 3.9%, compared to a 12.3% increase last year.

The company attributed most of its sales decline to poor performance in the homewares section as well as its withdrawal from the promotional branded goods 'grey market'.

Progress was made during the period in core clothing areas, the company said, such as ladies' tops, skirts and tailoring, men's T-shirts and formal trousers and children's wear ranges.

CEO John King said: "This was a difficult year for Matalan in a tough retail environment. Much work has been done to improve our retail proposition, and progress has been made, particularly in our core clothing business.

"The retail environment remains subdued and pressure on costs continues. However, against this difficult backdrop, I am pleased that Matalan has improved its market share in clothing."

Matalan foresees an equally turbulent time ahead in the coming period, predicting "weak consumer demand" and a high rate of rivalry.

The company has seen better results over the last few weeks, however, with increased demand for core apparel such as knit wear slowing its same-store sales decline to 2.2%.

Demand for the lowest prices possible has continued to drive high-street rivalry recently, especially within the high-fashion sector.