UK value clothing chain Matalan said same-store sales for the ten weeks ended 8 January increased 5.3 per cent compared to an 8.2 per cent fall in the comparable period last year.

Matalan, which has been at the centre of ongoing takeover speculation over the last few months, said that gross margin for the for the ten-week period rose 1.4 per cent compared to last year.

The company added that it had taken sales from middle-market retail chains such as Marks & Spencer and Bhs after it made its collections more fashion-aware, and sourced more stock from countries closer to the domestic market for a quicker stock turn.

Matalan said that its full-year forecast remained the same and that it was happy with analysts' predictions of £84 million in pre-tax profits.