Quiz out of fashion as its shares tumble by a third

CHEAP and cheerful fashion retailer Quiz was down in the dumps as it revealed sales over Christmas had fallen short of expectations.

Shares in Quiz, which has collaborated with reality TV show The Only Way Is Essex on a revealing line of sequin-spangled party outfits, plummeted 32.5pc, or 11.55p, to 24p.

The retailer, which has 71 stores and 169 concessions across the UK, warned profits would now be around £8.2m this year, less than previously than expected.

It came hot on the heels of another profit warning in October, where profit expectations were revised down to £11.5m.

Quiz, which was founded in Scotland in 1998 and employs more than 1,000 staff in the UK, targets ‘fashion-conscious women’ aged between 16 and 35. Most of its clothes sell for around £30.

Online revenue rocketed by 34.1pc over the six-week Christmas period from November 25 to January 5, compared with the same time last year, as revenue from its own websites shot up by 50.8pc. Takings in the shops were less impressive, but revenue across Quiz stores and concessions still climbed by 1.6pc. The chain opened three stores last year and relocated two into larger spaces.

However, sales were helped out by heavy discounting as it became clear shoppers were not going to buy all of Quiz’s Christmas stock.

Dresses are selling on the website for as little as £4.99. This is expected to push down profit margins for the six months to March 31, 2019 to around 60.5pc.

Tarak Ramzan, Quiz’s chief executive, said the business was working against a ‘backdrop of challenging trading conditions over recent months’, but that he was confident of the firm’s longterm prospects.

Men’s suit firm Moss Bros was also struggling in what it called a ‘tough marketplace’, and also had to make deeper discounting in the weeks following Black Friday in November to remain competitive.

Physical stores, especially those in ‘high-profile’ locations, underperformed as fewer customers walked through the doors in the 23-week period from July 19 to January 5, Moss Bros said.

However, online sales were up 27.8pc, and the menswear chain said it should manage to stem its losses at £600,000. Investors gulped down any positivity they could, as shares climbed 3pc or 0.8p to 27p.

The online-only retail model appears to be working for household appliance site AO World, which saw revenue climb by 8.2pc in the three months ending in December. It racked up its highest-ever sales total in November, and Black Friday deals helped UK revenues to grow 4.4pc over the period. Shares were up 1.8pc, or 2.2p, to 126.4p. On the FTSE100, housebuilders led the way as Bank of America Merrill Lynch raised its recommendation for the sector. Its analysts noted that Brexit sentiment has caused housebuilders’ shares to swing wildly – they head down when a hard Brexit looks more likely, and up when a softer deal appears to be on the table.

BAML’s Andy Murphy said: ‘It seems at least possible, or even O probable, that some sort of Brexit resolution is within sight and therefore the house building sector may see some relief.’

Taylor Wimpey shot up 4.8pc, or 7.15p, to 156.05p, Persimmon climbed 4.4pc, or 92p, to 2203p and Barratt Developments edged up 2.9pc, or 14.2p, to 503.4p.

The FTSE 100 ended the day down 0.4pc, or 24.69 points, at 6918.18 points.

United Arab Emirates-focused private hospital business NMC

Health dragged the index down, as analysts at Jefferies cut their target price for the stock to 2300p.

The group’s shares fell 5.1pc, or 148p, to 2782p.