Matalan's style didn't suit all directors

Paul Mason left abruptly after what a spokesman for the group called a disagreement over "management style, not strategy".

The company's retail director Andy Clarke has also quit.

Despite assurances from the chairman that current targets would be met, the shares slumped 26% to 144.5 pence.

Mr Mason was poached from the supermarket chain Asda after the similarly abrupt departure of his predecessor Angus Monro in April 2001.

'Slaughtered'

Mr Mason encountered problems during his 14-month tenure at Matalan, which is based in Skelmersdale, West Lancashire.

In January, he was forced to admit he would miss sales targets after poor Christmas trading.

The problem with him appointing such a strong team was that ultimately it meant they could afford to get rid of him Tony Shiret, CSFB

He had recruited a strong team of former Asda colleagues, including Mr Clarke.

Analysts were surprised by the departures and warned that they came at a crucial time for the struggling budget clothing sector.

"At this stage we would see our (earnings) number for 2004 as being very much at risk," said Iain McDonald, a retail analyst at Numis Securities.

Executive chairman Ian Hargreaves, whose family owns more than 50% of Matalan's shares, tried to ease concerns by insisting he was still comfortable with targets.

"I knew I was going to get slaughtered for this but as executive chairman I only do what is best for the company," he told Reuters.

'Not worth betting on'

Analysts suggested the resignation could stall Matalan's strategy.

"We do not think it is worth taking the bet given the current share price and the potential for more board conflict," said analysts at Dresdner Kleinwort Wasserstein.

The chief executive's shoes will now be filled by John King, the current trading director also brought in by Mr Mason.

"The problem with him (Paul Mason) appointing such a strong team was that ultimately they could afford to get rid of him," said Tony Shiret, an analyst at Credit Suisse First Boston.