Cost of living crisis: Scottish fast fashion retailer Quiz cautious despite sales joy

Quiz, the Glasgow-headquartered “fast fashion” retailer, has hailed a jump in half-year sales, but said the cost-of-living crisis has dented consumer confidence.

In a trading update to investors, the group said that while sales surged by a “marginally” better-than-expected 37.2 per cent to £49.4 million over the six months to September 30, revenue growth has eased over the past two months.

It said it was a “trend consistent with other fashion retail businesses as inflationary pressures began to impact consumer confidence”.

Despite this, the group still saw store and concession sales leap by 48.2 per cent to £24.6m as it benefited from the return to normality on UK high streets since pandemic restrictions ended. It said like-for-like sales were consistently higher than before the pandemic across its 62 shops and 62 concessions.

In July, the retailer said it had returned to the black thanks to recovering demand for party wear.

The latest update noted that online sales rose by 28.8 per cent to £16.1m, though the group said efforts to boost shopper basket values had been partly offset by a rise in clothes sent back.

The firm also hailed a rise in profitability over the first half thanks to stronger demand for full-price items, while it also said it had been able to recover rising costs as inflation pressures ramped up.

Quiz kept its full-year guidance unchanged, but said it will be dependent, as ever, on the crucial Christmas season and noted the uncertainty over the outlook for shopper confidence.

Glasgow-headquartered Quiz is an 'omni-channel fashion brand', specialising in occasion wear and dressy casual wear. Picture: Quiz plc

It told investors: “Whilst it remains uncertain what impact the current cost-of-living pressures will have on consumers’ disposable income and on their demand for Quiz products over the remainder of the group’s financial year, management remain confident that the product proposition and commitment to providing glamorous looks at value prices will continue to appeal.”

Panmure Gordon analyst Matthew Webb noted: “Quiz has traded well in fiscal H1, with revenue up 37 per cent and gross margin ahead of the comparable period. It has also seen a significant improvement in its financial headroom.

“Although trading conditions are clearly becoming more challenging, we make no changes to our [full year] forecasts.”

In July, the group posted underlying pre-tax profits of £788,000 for the year to March 31 against losses of £9.6m the previous year. Revenues nearly doubled to £78.4m from £39.7m the year before thanks to the end of Covid restrictions and less lockdown disruption for its stores and concessions.

Chief executive Tarak Ramzan said at the time: “Despite the well-documented challenges across the retail sector, we remain encouraged by customer demand for the Quiz brand. Whilst there are significant levels of uncertainty impacting the consumer right now, we are confident that Quiz is well-positioned to continue to deliver against its strategy and drive long-term, sustainable and profitable growth.”

The firm said it had “marginally” raised prices in the face of higher costs of garments and shipments.

It cautioned over the “potential for sales later in the year to be impacted by the effect of the inflationary environment and increases in the cost of living on consumer confidence”.