Matalan drops Korean clothes supplier amid rumours of a pricing row
Matalan has dropped one of its long-term suppliers amid rumours of price concerns.
Korean firm JJ Global will no longer manufacture clothes for the discount retailer, following a n alleged dispute between JJ Global boss Kenny Kim and Matalan chief executive Jason Hargreaves.
The Sunday Times has claimed that Kim and Hargreaves argued over pricing, as the value of the pound continued to fall in the wake of the EU referendum. Many fashion retailers buy their clothing products from Asia using US dollars.
Liverpool-headquartered Matalan is known for its cheap clothing and homeware, which is manufactured cheaply by Asian suppliers. The firm was implicated in the Rana Plaza disaster in April 2013, when a Bangladeshi clothing factory collapsed, killing 1129 people. Matalan was criticised at the time for delaying a donation to the Rana Plaza compensation fund, and eventually paying in less than £72,000, rather than the £3m which was recommended by various labour groups.
Last year, Matalan saw its full-year earnings almost halve to £56.2m thanks to ongoing distribution issues at its warehouse in Knowsley. The warehouse problems also caused the firm’s bond values to tank, with one tranche trading at just 68p on the pound as of last week.
This year, overall sales fell by 6 per cent to £245.5m in the three months ending August 27, although earnings showed some signs of recovery.