Fashion retailer Quiz has warned it will take a £400,000 hit following the collapse of House of Fraser, but said it was performing well and confident of continued growth this year.
The Glasgow-based clothing company, which historically operated 11 House of Fraser concessions and sold its products through the chain’s website, announced that the department store’s fall into administration, and subsequent takeover by Mike Ashley’s Sports Direct, had resulted in outstanding debtor balances and other costs.
In a stock market trading update, the firm said: “Further to House of Fraser’s entry into administration and the selective acquisition of assets by Sports Direct International plc, the group is expecting to provide £400,000 in the six months to 30 September 2018 in relation to outstanding debtor balances and other potential costs.”
Sports Direct’s acquisition of House of Fraser for £90 million resulted in a host of the retailer’s suppliers and partners being left out of pocket.
However, Quiz, which floated on the Alternative Investment Market in July 2017, announced it had performed well over the summer and is seeking to add further stores to its portfolio, following two successful additions this year.
It said: “The board is pleased with the group’s performance during the period which shows continued growth across each of our channels.
“Our UK stores and concessions have performed well during the year-to-date, despite the previously reported softening of footfall during April.
“We have opened two new standalone stores during the period and we continue to review opportunities for further expansion of the store estate.”
Quiz said it was on track to deliver market expectations for the full year, adding a key focus was maximising the brand’s online potential by investing in the ongoing development of websites and apps.
Nick Bubb, independent retailing analyst, said: “Despite Footasylum’s moaning about the challenging state of the High Street, the fashion chain Quiz has issued a reassuring AGM trading update.
“The new stores in Bluewater and Oxford have started well and the only black spot is that Quiz has had to write-off £400,000 on its House of Fraser concession business.”
Results released in April showed Quiz sales rose by 30 per cent in the year to the end of March, driven mainly by online growth, which jumped by just under 160 per cent.
Quiz will provide its next trading update in October.