Fast fashion retailer welcomes reopenings as sales decline 66%
FASHION chain Quiz said it looked forward to further store reopenings following the Covid lockdown as it reported a 66 per cent fall in sales to just under £40 million for the year to end March 2021.
In a trading update, the Glasgowbased company said revenues were impacted by prolonged closures of stores and concessions, as well as a “material detrimental impact” on demand for its trademark occasion wear, because of social events and activities being curtailed.
As a result, full year revenues were £39.7m, down from £118m the year before.
“With prolonged periods of store closures, the past 12 months has been a very challenging period for many in the UK retail sector, and Quiz has not been immune to this,” said chief executive and founder Tarak Ramzan.
Against the difficult trading backdrop, Mr Ramzan said the group had taken “proactive actions” to preserve cash and “realign our store estate for the future retail landscape.”
Last June, Quiz put the subsidiary that runs its 82 standalone stores into administration, leading to the immediate closure of 11 stores, with 93 job losses. Shedding lease liabilities and selling the subsidiary to another part of its group helped the business book a one-off gain and report a half-year pre-tax profit.
In the full year trading update, Quiz said sales through its online, international and UK stores and concessions channels had fallen respectively by 42%, 65% and 82%.
Despite this drop in revenues, the group said it still had net cash of £1.5m at the year end, reflecting “tight cost control.”
It also has £3.5m of bank and credit facilities, with no financial covenants – restrictions – attached.
Quiz said it had now re-opened 36 stores and 87 in-store concessions across England and Wales following the re-opening of non-essential retail on Monday. However, 72 of these concessions are in Debenhams stores that are scheduled to close by the end of May 2021.
Revenues from Debenhams UK concessions fell 79% to £3.4m in the 2021 full year, from £16.5m in 2020. Quiz has also stopped selling through the Debenhams website.
“Given the previous decline in revenues, the group does not anticipate that the termination of sales through Debenhams will materially impact upon its profitability or cash flows,” the company said.
In Scotland, where Quiz has 19 stores and one concession, and Northern Ireland, reopening was currently expected on April 26, although this remains subject to confirmation.
The company employs 950 people. Mr Ramzan said: “We remain confident that there is robust underlying demand from our customers for the Quiz brand and our trademark dressy and occasionwear. We are looking forward to being able to serve customers again through our store estate and to the gradual opening up of the retail and leisure economies over the coming months, which we believe we are well placed to benefit from.”
The group said it continued to focus on identifying and delivering new opportunities to grow revenues through its own website and store network, as well as by working with “new partners appropriate for the Quiz brand.”
The board of directors said it believed the continued relaxation of restrictions on social activities would result in increased demand for its ranges, which have “traditionally provided popular options for social events and celebrations.”
Mr Ramzan inherited his father’s manufacturing business at the age of 18 and opened his first retail store in Glasgow in 1993. He runs Quiz with his son, Sheraz, who is chief commercial officer.
Quiz joined London’s Alternative Investment Market for smaller companies in 2017, netting around £92m for the family.
Quiz says it operates through an ‘omni-channel,’ fast fashion business model, which encompasses online sales, standalone stores, concessions, international franchises and wholesale arrangements. The company expects to announce its full year results in the late summer.
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The past 12 months has been a very challenging period