Bonds sold by Matalan Ltd. dropped to records after the U.K. clothing retailer reported a 90 percent decline in second-quarter earnings and lowered guidance for the full year.
The company’s 150 million pounds ($230 million) of second-lien notes due June 2020 tumbled 12 pence on the pound to 73 pence and its 342 million pounds of first-lien bonds due June 2019 dropped 5 pence to 90 pence, according to data compiled by Bloomberg.
Earnings before interest, tax, depreciation and amortization plunged to 2.3 million pounds in the 13 weeks through Aug. 29 from 21.9 million pounds in the same period last year as Matalan increased discounts to reduce inventory at a new distribution center. The company revised its full-year earnings forecast to about 60 million pounds to 65 million pounds from an already lowered expectation of 80 million pounds to 85 million pounds.
“The results for the second quarter reflect the severe financial impact of the action taken to sell through the unprecedented level of excess spring summer stock,” Jason Hargreaves, managing director of Matalan, said in a statement. “A number of key steps designed to improve performance have been identified and are being implemented throughout the business..”