High street fashion chain Quiz is keeping 15 of its shops permanently closed as it battles to turn its fortunes around via a major restructuring.
The retailer, which specialises in going out, dressy clothes, was hit hard by enforced temporary store closures during lockdown and saw its sales slump 77 per cent to £13million in the five months to 31 August.
As a result of the pandemic and pre-existing challenges facing the retail sector, Quiz will now only reopen 60 out of the 75 UK stores it operated before Covid-19 hit.
It is not yet clear which 15 shops Quiz is keeping shut for good, or whether any job losses are on the cards. This is Money has contacted Quiz for further comment.
Shut for good: High street fashion chain Quiz is keeping 15 of its shops permanently closed
Despite facing a tough time, shares in AIM-listed Quiz have jumped sharply today and were up 16.03 per cent or 1.19p to 8.64p this morning. But, at the same point a year ago the retailer’s share price stood at 16.38p.
Today, Quiz also announced that it plans to keep three of its stores in Spain permanently closed. In the Republic of Ireland, Quiz has reopened four of its seven shops, with negotiations ongoing for the other two sites.
The announcement comes after a tough period for Quiz, which has suffered sliding high street sales and losses due to tough retail conditions.
‘It was obvious given Quiz’s product range that the Covid-19 ridden summer would have been tough and today’s statement shows us just how bad it got,’ analysts at Peel Hunt said.
Peel Hunt’s analysts added: ‘The dressy range was sadly inappropriate at a time when nobody was going out and there is little hope that life will return to party-normality any time soon.’
Party is over: Quiz also announced that it plans to keep three of its stores in Spain permanently closed
Quiz said the pandemic had ‘significantly impacted’ its sales after being forced to temporarily shut its stores in late March.
‘In order to protect Quiz’s distribution centre colleagues’, the retailer’s online shop was also suspended for two weeks in April.
Between April and August this year, the group’s online fell by 54 per cent to £8million when compared against the same period last year.
Since then, Quiz has been expanding its casual clothing ranges ‘to respond to the additional demand for this product.’
It added: ‘This is in response to the decline in demand for occasion wear further to the ongoing restrictions on social events.’
In a bid to get rid of excess stock, Quiz has also been giving shoppers bigger discounts than they normally would. This means the company’s gross margins ended up being around 6 per cent lower than a year ago.
Quiz said: ‘It is not anticipated that this level of discounting will continue for the remainder of the year.’
As well as operating through high street stores and online, Quiz also sells its clothes via concession sites.
Quiz said today: ‘Prior to the enforced closure of non-essential stores in the UK due to COVID-19, the Group operated 164 concessions in the United Kingdom. Further to their closure on 22 March, concessions progressively re-opened from mid-June. However, a number of these concessions have not reopened and as at 9 September 2020, the Group operates 141 concessions in the United Kingdom.
‘Whilst sales generated in UK standalone stores and concessions remain below levels generated in the previous year, the Group is encouraged by the consistent improvement in like-for-like sales in recent weeks.’
The company also said that its main customer in the US recently entered a bankruptcy process, adding that ‘its future remains uncertain.’
Quiz said: ‘The Group is actively pursuing new opportunities in the U.S market.’
As at 8 September, the group had £6.1million of cash available and £3.5million worth of bank facilities available which are currently scheduled to expire on 31 October and which Quiz intends to renew.
A struggling sector
The retail sector has been thrown into disarray after being forced to shut its shops when Prime Minister Boris Johnson announced the country was going into a national lockdown in late March.
But, many retailers had been struggling with dwindling footfall, sales and profits long before the pandemic hit the country.
The pandemic has simply accelerated the pace of change in the sector, with thousands now at risk of losing their jobs.
Fashion chain River Island is cutting 350 jobs to slash store management and senior sales roles in a major shake-up of its operations.
Department store chain John Lewis also plans to keep eight of its stores permanently closed, putting over 1,000 jobs at risk.
High street stalwart Marks & Spencer plans to axe 7,000 jobs in three months this year across its stores and management.
M&S said the coronavirus pandemic had made it clear there had been a ‘material shift in trade.’
Meanwhile, Harrods told its staff that one in seven of its 4,800 employees would be affected by job cuts arising from the ‘ongoing impacts’ of the pandemic.
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