Fashion chain Quiz sinks to a loss
BOSSES at fashion chain Quiz have blamed economic uncertainty and shoppers spending less on the high street as it sunk into the red.
The retailer added that even though actions to address the poor performance are under way, a number of stores will continue to be loss-making.
Quiz operates a series of stores and concessions around Northern Ireland.
It saw a pretax loss of £6.8m for the six months to September 30, compared with a £3.8m profit in the same period a year ago.
Quiz took the hit primarily due to a £7m one-off charge related to onerous leases and a re-evaluation of the store estate.
On an underlying basis, which strips out one-off costs, it made a profit of £2.7m.
Tarak Ramzan, founder and chief executive, said: "Much of the UK retail sector has remained under pressure during the period impacted by macro-economic uncertainty as well as the accelerating structural shift to online retailing.
"Whilst it is disappointing to report a decline of profits year-on-year, management are focused on implementing the actions identified further to the group's business review conducted earlier in 2019.
"We are pleased to report progress improving gross margins and reducing costs across the business, and will look for further improvements to develop our omni-channel offering.
"We have also taken actions to address the performance of our UK stores and concessions through renegotiating rents where possible and exiting a number of loss-making concessions.
"Over the next two years we will have the opportunity to renegotiate or terminate leases in 50 per cent of our UK stores.
"However, before leases can be renegotiated at current and projected sales levels a number of our stores will lose money."
Sales during the current period fell five per cent compared with a year earlier, to £63.3m, although the entire fall came from shoppers not spending as much in stores, where sales in the UK were down 11 per cent.
By comparison, online sales held up and were flat during the period at £20m.
Quiz also opened two stores and nine concessions during the period, and closed seven sites, as it took a £400,000 hit from the collapse of House of Fraser, where it operated from.
Overseas, bosses said sales were up seven per cent with growth in its franchises in the US and Middle East.
In October the company unveiled plans for a cost-cutting exercise to save between £2m and £3m a year, with a bigger push towards online sales. The dividend was also scrapped.