Matalan is expected to appoint Euro RSCG London to handle an advertising brief for the discount clothing and homeware retailer.
The company had turned its back on using an above-the-line agency last year, after parting company with M&C Saatchi and its sister direct marketing agency Lida. Since then, work has been undertaken by an in-house team and the artwork and photography supplier Capricorn. It is understood that sister agency KLP Euro RSCG may also pick up a database management project.
According to Nielsen Media Research, the company spends £11.5m a year on advertising. Euro RSCG is understood to have pitched against four other agencies. A spokeswoman for Matalan declined to confirm an appointment had been made and would only say that the company worked “with agencies on a project basis”.
Earlier this year the Matalan group, which includes jeans brand Lee Cooper, announced a 48 per cent fall in annual profits for the year ending February 28, down from £117.4m to £60.7m. This was accompanied by speculation that Asda-owner Wal-Mart was considering bidding for the retailer.
The chain has since embarked on a store refit programme and a new product mix, and boosted its marketing efforts. In September, the Matalan group reported improved sales with a 4.5 per cent rise on a like for like basis for the six months ending August 28. Analysts are forecasting full-year pre-tax profits of about £85m.