Credit Lyonnais Securities on Tuesday downgraded discount retailer Matalan Plc to "add" from "buy" in a review of UK retailing stocks, dealers said. Matalan shares dropped 17-1/2 pence or 3.1 percent to 550-1/2p by 12:45 GMT. The stock had rallied from a steep sell off last month, sparked by a margin squeeze at the company, to hit a four week high at Monday's close.